Rashtriya Ispat Nigam Limited (RINL) saw a further increase in its inventory in Dec’21. The closing stocks at the end of December last year rose by more than 33,000 tonnes or 11% m-o-m to 0.34 million tonnes (mn t) against 0.31 mn t seen at the end of Nov’21.
It may be recalled Nov’21 stocks had risen 41% m-o-m.
Sales rose 23% m-o-m to 0.38 mn t in Dec’21 against 0.31 mn t seen in Nov’21. The month of December saw lower export orders because the overseas market was slow, which led to subdued trading activities. However, sources in the company said domestic demand in Dec’21 was not bad as government infrastructure projects inch towards deadlines during the last financial quarter (Jan-Mar).
Mills in general had to reduce prices for long products last month because of dull exports demand. In rebar, mills also did project related sales at INR 53,000/t levels, delivered to Mumbai warehouses, although their operational prices were at INR 55,000/t levels. This was done to ease inventory pressure, especially against the backdrop of lower export volumes.
Outlook
RINL booked two export cargoes last month, implying some export activity did happen for January shipments. Sales would thus be better in the current month compared to last. However, a company source said, the omicron surge may weigh on domestic demand.
Thus, price corrections are limited from here. Inventory pressure may not allow mills to increase prices.
On a yearly basis, the PSU achieved crude steel production of 5.59 mn t in CY’21. Its saleable steel volume grew 31% in CY’21 y-o-y, exports were up 10% y-o-y and sales grew 71% y-o-y.
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