India: At over 1.4 mn t, SAIL posts 35% y-o-y sales growth in Aug '20

State-owned Steel Authority of India Limited (SAIL) has announced impressive sales of 1.434 mn t for Aug '20 - up 35% from 1.06 mn t in Aug '19. The PSU steel major has been reporting high sales numbers since emerging from the lockdown in Jun '20.

While total domestic sales in Aug '20 was reported to be at 1.24 mn t, exports by SAIL during the month were recorded at 0.194 mn t. Domestic and exports sales growth for the month were reported to be respectively 23% and 250% higher vis-a-vis Aug '19.

SAIL reported 1.583 mn t of sales during Jul '20- the steel-maker's highest in the month of July recorded so far and about 50% higher compared to Jul'19 sales which were recorded at 1.059 mn t.

The company sold over 1.27 mn t of steel in the domestic market and exported 0.31 mn t in Jul '20 - a growth of 29% and 349% respectively compared to the corresponding period last year.

Likewise in Jun '20 the steel major clocked sales of over 1.27 mn t while exports for the month stood at a remarkable 0.34 mn t which acted as a kind of safety valve for the PSU, especially because domestic consumption dropped by over 50% during Apr-Jun '20, according to data released recently by the Central Statistics Office (CSO).

Total exports sales during Jun-Aug '20 stands at 0.844 mn t which is undoubtedly impressive compared to total annual exports of 1.8 mn t by SAIL in FY20. However, monthly exports growth slipped to 250% in Aug '20 from 349% in the preceding month. Also, in Aug '20 exports dropped by over 100,000 t thereby confirming SAIL's earlier claim that exports as a ratio of total sales would keep dropping progressively with the gradual revival of domestic demand.

SAIL's exports allocations currently are just about 25% of overall sales, a source informed SteelMint.

In the press despatch announcing Aug '20 sales numbers released by SAIL, Chairman Anil Chaudhary was quoted as saying: "Post-COVID-19, we had resolved to come back strong... after opening up, the market has also been echoing positive sentiments and a lot of meticulous planning has gone into leveraging those sentiments."

Even during the pandemic the PSU steel-maker has supplied special grades and vanadium alloyed rails to the Indian Railways, augmented expertise to produce a special super duplex stainless steel grade from its Salem unit and supplied WAG9 wheels for electric locomotives which is import substitution.

The state-owned manufacturer has forecast a 5% year-on-year rise in sales to 15 mn t in FY21. The company aims to increase sales by scaling up exports to 2.4 mn t in 2020-21. Exports hit a record high of 1.18 mn t in 2019-20 - a year-on-year rise of 54%.

Higher exports helped raise the company's total sales during FY20 to their highest level of 14.5 mn t, an increase of 2.8% on the year. Higher exports also helped in reducing inventories to 1.65 mn t as of 30th Jun'20 compared with 2 mn t on 30th May '20.

SAIL emerged as the largest steel producer in India in FY20 with crude steel output touching 16.15 mn t.