State-owned steelmaker Steel Authority of India Ltd (SAIL) expects to lift sales by over 5% in FY’21 on the back of higher export volumes and a recovery in domestic demand during the second half of the fiscal year.
SAIL has guided for 15 mn t sales volume for FY’21 against actual sales of 14.23 mn t in FY’20, Sail executives said at an analyst conference call.
The company is aiming to double exports to 2.4 mn t in FY’21 from 1.18 mn t in FY’20. The company exported about 350,000 t steel products in Jun’20 with major buyers being China, Vietnam, Southeast Asia and Saudi Arabia.
Higher exports eroded Sail’s products inventory to 1.65 mn t as on 30 Jun’20 compared with 1.7 mn t on 31 Mar’20 and 2 mn t as on May’20. SAIL produced 16.15 mn t crude steel and 15.08 mn t of saleable steel during FY’20.
Sail expects domestic steel demand to improve in H2 FY’21 if labour shortages are resolved in the industrial and construction sectors. An exodus of migrant workers to hometowns have hobbled construction, logistics and manufacturing sectors in India over the past few months.
Net sales realization for SAIL fell by INR 700/t q-o-q in Q1 FY’21 to INR 37,700/t. The decline in realization was more for flat steel sales than long products.
SAIL was allowed to sell a total of 70mn t, 55-60% Fe iron ore in domestic markets in FY’20 and FY’21 to prevent shortages due to expiry of several mining leases in Odisha, but sales have not taken off due to delay in approvals from the state governments of Chhattisgarh and Jharkhand.
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