SAIL losses widen to Rs 1,529 crore

Last time it had gone negative in third quarter was in 2003-04

State-run Steel Authority of India (SAIL) continued with losses in the third quarter. It recorded a massive loss of Rs 1,529 crore, compared to last year’s profit of Rs 579 crore.

Though the company posted loss in the second quarter ending September 2015, it had last gone negative in the third quarter of 2003-04 when it showed a loss of Rs 79 crore.  “The global scenario is very challenging and demand-supply imbalance resulting in price adjustments is hurting the domestic steel industry. We are focused on ramping up production from our new units and are adopting cost efficient strategies to improve our net sales revenue,” P K Singh, chairman and managing director, said.

Compared to last quarter, the company’s losses rose by 45 per cent – from Rs 1,056 crore to Rs 1,529 crore. The firm had shown a loss of just Rs 322 crore in the first quarter. “Global steel prices have registered a steep fall over the last year falling from around $460 to $280 mainly due to slowing Chinese consumption which is leading to oversupply of cheap steel into the market. Imports into India are at an annualised rate of 12 million tonnes, which is 20 per cent up over a very high base of  2014-15 when they had surged by 75 per cent over the previous year,” said the firm.

The firm had showed a profit growth of 8.7 per cent and 10 per cent in the third quarter of 2014-15 and 2013-14, respectively.

“The domestic market continues to suffer from the rising imports particularly from China, Japan & Korea at prices which are much lower than the domestic cost of production, affecting the margins of steel producers operating in India,” added the company.

However, Singh hoped the recent favourable policies announced by government and its concerted efforts to enhance infrastructure spends in viable sectors will improve the domestic demand and provide some relief to the Indian steel industry. The government had last week notified.