Vizag Steel Plant's sales slip in Q1

Rs 800 crore finished steel products pile up at different yards

Visakhapatnam Steel Plant (VSP) registered a decline in sales during the first quarter of the current fiscal. This has resulted in piling up of inventories and according to the current prices estimates, more than Rs 800 crore worth of finished steel products have been lying at different yards for the last one month.

Despite this, VSP is continuing its production as usual, said KK Rao, director (operations), VSP.

"We have reduced the prices of our products recently. So the company is expecting good demand for the products in the coming days. Moreover, in spite of our inventories, we have not cut down the production," he added.

VSP's sales declined by more than one lakh tonnes during the first quarter of the current fiscal as compared to the corresponding period of last fiscal.

During the first quarter of last fiscal, VSP sold 9.92 lakh tonnes (3.31 lakh tonnes in April, 3.27 lakh tonnes in May and 3.34 lakh tonnes in June) of steel products, whereas during the first quarter of the current fiscal, steel sales reduced to 8.88 lakh tonnes (3.08 lakh tonnes in April, 3.19 lakh tonnes in May and 2.61 lakh tonnes in June).

VSP registered a sales turnover of about Rs 1,362.31 crore during the first quarter of the current fiscal as against about Rs 1,454.44 crore during the corresponding period of last fiscal, thus posting a negative growth of about Rs 92 crore.

The main reason for this fall was the abnormal hike in the prices of steel products in the beginning of the current fiscal, Krishna Rao, director, Vizag profiles, a leading steel trading company, told Business Standard.

It may be recalled that VSP increased its steel products prices by about Rs1,750 per tonne in the beginning of April. It further raised its prices by Rs 400-500 in May.