28/10/2014 – Low pellets stocks concern Venezuela’s HBI producers

sources said Thursday.Some companies doubt whether Venezuela’s sole iron ore producer, CVG Ferrominera Orinoco (FMO), is set to resume production, as the miner announced in mid-September.FMO’s 3.3 million mt/year pellet plant has been mothballed since June 2013. FMO in September said it planned to resume operations by the end of the year, and that it had capacity to supply all of the domestic market.But HBI producers remain concerned.

“Once our inventory of pellets is over, we can’t continue production,” said a source at producer Briquetera del Caroni, former Venprecar. The current pellet inventory can carry production until December, he said.The same situation was echoed at Briqueteras de Venezuela (BriqVen), which resumed production in late August. It has had a production rate of 58,000 mt/month since October.”We cannot stop production again. We lost clients during the year, and now we are in the process of recovering them,” said a second producer source, who reported selling HBI in the international market at $320/mt FOB, “which is a good price; we cannot lose this market again.”In April, Venezuela’s government agreed to import 600,000 mt of pellets for its HBI producers. However, only a small portion of the total was reported delivered, and the prevailing sentiment within the industry is that no additional aid is coming until the end of the year.

Source – Platts.com