Steel Authority of India (SAIL) is India’s 2nd largest steel producing company in terms of production after JSW Steel. The company reported crude steel production of 14.49 MnT in FY17. Saleable steel sales stood at 13.110 MnT in FY17.
The steel maker reported EBIDTA of INR 672 crore in FY17.
In the investors conference call conducted yesterday i.e 31 May’17, company announced quarterly results for Q4 FY17 as well as for financial year 2016-17. Below are the highlights of the same:
1. SAIL Crude steel production up 2% in FY17 – Crude steel output of SAIL was registered at 14.495 MnT in FY17 compared to 14.279 MnT in FY16. SAIL has set FY18 production target at 16 MnT
2. Coking Coal prices to come down further- SAIL expects benchmark index of Coking coal to remain at USD 150-160/MT in Q1 FY17 and FY18 prices to be around USD 120-140/MT. Average cost of coking coal in FY17 was USD 144/MT. Cost increase due to higher coking coal prices was INR 4,600 crore
3. Finished steel inventory narrowed down in FY17 – Inventory of finished steel narrowed down to 2.6 MnT in FY17 against 3.5 MnT in FY16.
4. Export volumes increased drastically in FY17 – Higher realizations in exports over improved global prices resulted in increased exports to 0.67 MnT in FY17. SAIL anticipates export volumes of 1.5 MnT in FY18.
5. Domestic flat steel prices higher than imported offers – Plunge in flat steel prices in global market resulted in cheaper imported offers especially from China, Japan and South Korea. Domestic flat steel prices in India are comparatively higher than landed cost of imports. According to SteelMint analysis, in mid of May’17 the gap between domestic HRC & imported was around INR 1,500-1,800/MT.
6. Impact of GST – Company and dealers are drawing down inventory in anticipation of Goods & Services tax (GST). Expect extension of GST to 1st Sept’, 2017. Government may give 2-3 months credit extension without any penalty.
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