SAIL sees steel prices slipping further in current quarter
Steel Authority of India expects its blended realizations to sequentially fall another Rs 1,000 per tonne this quarter, as local steel prices continue to be weighed down by cheap Chinese imports, a senior executive said.
Net sales realization, or blended steel prices for the June quarter, stood at Rs 53,700 per tonne, down Rs 800 from the March quarter.
The cost of coking coal, though, is likely to remain at levels similar to the June quarter, even though prices have corrected in the last few weeks. This is because the state-owned steelmaker has stocked up higher-than-average coking coal from some of its miners with whom it has long-term agreements, Anil Kumar Tulsiani, Director (Finance), told analysts after the company’s earnings.
The blended cost of coking coal was Rs 22,000 per tonne in the June quarter, and is likely to remain around these levels, he said. Most other steel-makers have guided for lower costs of coking coal in the September quarter, in line with the prices globally.
The company sees its coal inventory trending lower over the next few months, which will also help it free some working capital. Debt during the quarter rose by more than Rs 5,000 crore due to higher stock of coking coal as well as inventory for steel worth Rs 1,000 crore, the company said.
Inventory for steel stood at 1.84 million tonne during the quarter, the company shared.
CAPEX
SAIL has a production capacity of 20 million tonne currently, and plans to add another 15 million tonne of capacity over the next five-six years at
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