India's pellets capacity crosses 100 mn t as mills opt less for sinter

India's pellets capacity has increased to over 100 million tonnes (mn t) in 2021, as per data maintained with SteelMint. Further capacities are coming up too, especially from primary mills like JSW Steel and Tata Steel. Some smaller mills have also filed applications, seeking approval to set up pellet plants. But SteelMint's assessment is that these fresh capacities will not get commissioned before end of FY'22.

Odisha largest producer

If we look state-wise, the largest capacity is being held by Odisha at 37 mn t, followed by Karnataka with 27 mn t, Jharkhand with almost 11 mn t and Chhattigarh with around 10 mn t. States like Andhra Pradesh (8 mn t), West Bengal (8 mn t) also contribute while others add almost 9 mn t jointly.

Also, the actual production was pegged at around 67.50 mn t in FY'21, with exports comprising 13.75 mn t and domestic consumption, at around 54 mn t. In the entire corpus of nearly 67.5 mn t of production, the share of captive production was around 45% while merchant's was 55%.

Company-wise break-up

Company-wise, JSW Steel is the largest producer with 27 mnt, followed by AM/NS India (at 20 mn t) after its 6-million tonnes per annum (mntpa) plant in Paradip got commissioned recently. Thereafter, followed JSPL (10 mn t), Tata Steel (9 mn t) and Rashmi Group (5.7) mn t). The balance five top producers include other Brahmani River Pellets, KIOCL, Godawari Power and Ispat, Shyam Metalics and BMM Ispat.

Why are capacities increasing?

Mills are showing an increasing propensity towards using pellets in blast furnaces instead of sinter. The reasons are as follows:

• Over a period of time ore quality deteriorates. Unlike sinter, pellets give mills the flexibility to handle these low grade ores. "The increased use of pellets has more to with productivity, and the government's push for beneficiation/incentives for pelletisation. Over the longer term, high grade reserves are only going to get depleted, making sintering costly and also less environmentally friendly," a source told SteelMint.
  
  
• Environment is a major concern now and pelletising is a much cleaner process than sintering. The reduced carbon footprint is a key reason. A source said if India has to reach the targeted 300 mntpa installed crude steel capacity by 2030, this move forward will have to be supported by pellets and not sinter. "This is non-negotiable, now that there is a massive push for decarbonisation and green steel," the source emphasised.
  
  
• Pellets offer more benefits over sinter in blast furnaces due to ease of handling, chemistry control. Pellets also reduce coke consumption.
  
  
• A minimum volume of pellets is preferred in the blast furnace burden to maintain permeability.
  
  
• Pellets also give mills the flexibility to divert the material towards exports if domestic demand does not look good.
  
  

Outlook

As mills increase capacities, investment in pellets plants is likely to increase correspondingly in a bid to work towards a greener environment.