Lower sales on account of “huge surge in imports of low-priced steel” from countries including China saw steel giant SAIL log a massive Rs 1,528.7 crore stand-alone net loss for the December quarter.
The country’s largest steelmaker had reported a profit of Rs 579.1 crore in the same quarter last fiscal.
The total income of the Steel Authority of India Ltd (SAIL) dropped 19.5 per cent to Rs 8,939.1 crore during the quarter as against Rs 11,107.3 crore last fiscal.
Total expenses were marginally up at Rs 10,779.7 crore during October-December as against Rs 10,370.9 crore in the year-ago period.
“The company incurred a net loss of Rs 1,529 crore for the third quarter of 2015-16… primarily due to a 24 per cent decline in net sales realisations over the corresponding period last year. Sales were adversely impacted by a huge surge in imports of low-priced steel,” SAIL said in a statement.
Global steel prices have registered a steep fall over the last year to USD 280 from around USD 460, mainly due to a 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 FY15 when these had surged 75 per cent over the previous year,” the company said.
The domestic market continues to suffer from the rising imports, particularly from China, Japan and Korea, at prices which are much lower than the domestic cost of production, affecting margins of steel producers in India, it added.
“The global scenario is very challenging and the demand-supply imbalance resulting in price adjustments is hurting the domestic steel industry,” SAIL Chairman P K Singh said.
“We are focused on ramping up production from our new units and are adopting cost-efficient strategies to improve our NSR. The recent favourable policies announced by the government and its concerted efforts to enhance infrastructure spends in viable sectors will improve domestic demand and provide some relief to the Indian steel industry.”
The company registered a growth in production of hot metal, crude steel and saleable steel in the third quarter of 2015-16 by 2 per cent, 4 per cent and 14 per cent, respectively, over the preceding quarter.
“SAIL registered a 6 per cent growth in sales volume at 2.906 million tonnes over the previous quarter,” it said.
The revenue from Bhilai Steel Plant stood at Rs 3,292 crore while Durgapur Steel Plant chipped in with Rs 1,435 crore. Revenue from Rourkela and Bokaro Steel plants stood at Rs 1,594 crore and Rs 1,638 crore, respectively.
IISCO contributed Rs 712 crore revenue while Alloy Steels Plant recorded a revenue of Rs 131 crore. Salem steel plant’s revenue stood at Rs 400 crore while the Visvesvariya plant raked in Rs 57 crore revenue.
SAIL is the largest steel-making company in India and one of the seven Maharatnas of the country’s central public sector enterprises.
The state-owned PSU has chalked up an investment of Rs 1,50,000 crore till 2025 to ramp up steel production to 50 million tonnes, from 24 million tonnes.
The stock closed at Rs 38.95 on BSE, down 4.18 per cent from the previous close.