Steel companies lean on Indian market, post strong volume sales in Q2FY21

They have also been hiking prices almost every month, the latest being in October by Rs 1,500-2,000 a tonne, depending on the product category

Despite the challenging business environment, all domestic primary steel producers are gearing up for a strong September quarter as volume sales pick up ahead of festive season starting mid-October.

Tata Steel, the country’s oldest steel producer, saw it September quarter sales at 5.05 million tonne, up 73 percent from the preceding quarter and up 22 percent from corresponding period last year.

"We reduced exports to 24 per cent of overall deliveries and sharply ramped up domestic deliveries to 3.86 million tonne which translates to an increase of 164 percent quarter-on-quarter and 10 percent year-on-year," said Tata Steel in its release today.

All of the company's segments, including automotive and special products, branded and retail segment along with industrial products and projects, saw its deliveries increase in the period under review.

Sajjan Jindal-led JSW Steel, another strong player in the flat steel category along with Tata Steel, also witnessed a 38 percent jump sequentially in flat product production category to 2.84 million tonne in September quarter.

In the long steel products segment, production volumes stood at 0.77 million tonne in the quarter gone by, up 69 percent from preceding quarter.

“With this, the company has achieved average capacity utilization of 86 percent in September quarter in line with pre Covid-19 level of 85 percent of last year Q2. This is a quantum jump from capacity utilization of 66 percent for Q1 FY21, which was impacted due to the pandemic,” said JSW Steel in its BSE filing today.

Long steel product are used in construction and infrastructure, while the flat steel finds wide application in auto and consumer durables.

State-owned Steel Authority of India (SAIL) and Naveen Jindal-led Jindal Steel & Power (JSPL) too strong performance in long products category indicating pick up in infrastructure projects in the country.

With the revival of domestic steel demand, JSPL said it recorded a 29 percent year-on-year growth in domestic sales with 1.93 million tonne Q2 FY21 as compared to 1.49 million tonne in Q2FY20.

Sequentially, domestic sales were 23 per cent up, while on consolidated basis, sales moved up 16 percent, said Jindal Steel.

"We are ramping up sales and production, as India comes out of the lockdown effect and ramps up its economic activities towards a renewed growth path,” V. R. Sharma, managing director at JSPL was quoted as saying.Steel Authority of India Limited (SAIL) has registered an 31.3 percent growth in sales during FY21 over same period last year.

Post the Covid-19 related lockdown, the company has been witnessing an impressive sales performance which started in June’20, it said in a statement.

During Q2 of FY21, the saleable steel production also registered a growth of 5.2 percent over current period last year. The company’s strategic marketing efforts and customer-centric initiatives coupled with teamwork across the company, has contributed to this improvement in sales and production, it said.  

“The challenges during COVID-19 not only gave us an opportunity to test our resolve in the face of odds but also made us more determined to perform better. Our focused strategies coupled with zeal of the marketing team helped to leverage every single opportunity in the market. Also, the pick-up in the economic activities across sectors is enhancing the domestic steel demand," Anil Kumar Chaudhary, chairman at SAIL was quoted as saying.

As per Joint Plant Committee (JPC) data, India’s April-June consumption of steel had declined 55 per cent year-on-year, while exports had zoomed 145 per cent in the same period.

Meanwhile, companies have also been hiking product prices almost on a monthly basis with latest being in October by about Rs 1,500-2,000 per tonne depending on the product category.