SAIL Foresees Uptick in Steel Demand and Prices

SEATTLE (Scrap Monster): Soma Mondal, Chairman, Steel Authority of India Limited (SAIL) said that the uptick in steel demand and prices are likely to continue, at least for some more time.

The key driver of steel prices has been supply side constraints due to delay in ramping up of capacities in certain parts of the world, on account of subsequent waves of Covid-19 pandemic. The demand pick up in the auto, construction and white goods sector, coupled with fears of China closing down some of the inefficient steelmaking units have also boosted prices. Another factor that has contributed to high steel prices is the surge in raw material prices due to supply constraints.

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SAIL foresees possibilities of many unviable and closed capacities opening up, as the prices go up. This in turn would increase supplies and ease supply constraints. Over the next two or three quarters, the industry is likely to see modest pickup in production, as Covid-19 is more under control.

SAIL has been successful in consistently reducing its debt, which now stands at below INR 35,000 crore. Upon reducing it by a few more thousands, the company will focus on implementing next phase of expansion, said Mondal.