Steel Authority of India (SAIL) today said its inventories have started shrinking with the pick up in demand from end-users from the beginning of this month.
"There has been a brisk demand for the last few days -- from the beginning of the current month. Inventory has come down. Sales have picked up -- both for HR and long products," country's largest steel maker Steel Authority of India (SAIL) Chairman C S Verma told PTI.
According to a report by Joint Plant Committee, a Steel Ministry body, inventory with steel manufacturers, at the end of September, was 2-3 times of the stock that they were carrying at the end of March this year.
SAIL was carrying an inventory of four lakh tonnes at the end of March, 2012.
SAIL's inventories started piling up during the monsoon and the ongoing festive season to around one million tonne due to lower demand from consumer goods, additional capacity build up and increased imports.
However, SAIL Chairman said the company was not holding an inventory beyond the level of 10 lakh tonnes, at any point of time.
"We never had one million tonne inventory. That's a misnomer. You can't sale semis in the market," he said.
Verma said domestic steel prices have started increasing by USD 10 a tonne in the last few days in sync with international prices.
Apart from capacity addition and subdued sales, a major reason for rising inventories for domestic steel manufacturers was growing imports.
"Imports have risen by 33.7 per cent in the first six months of 2012-13 against the same period last year. Countries like Japan, Korea and China which are major suppliers of steel to India have increased their sales even above the average of 33.7 per cent of total imports," the report by Joint Plant Committee said.
India had signed FTA with Korea in January 2010 and with Japan in August last year. Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply.
India's steel import stood at 6.83 million tonnes in 2011-12.
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