India: RINL reduces Aug'21 inventory on adequate export shipments

State-owned Rashtriya Ispat Nigam Limited (RINL) has been able to reduce its inventory in Aug'21, as per data available with SteelMint. Inventory levels reduced by around 17% to 2.86 lakh tonnes against a closing stock of 3.44 lakh tonnes seen in Jul'21. The inventory liquidation was mainly on account of substantial export bookings made in Jun-Jul'21 that got shipped in August.

However, the PSU steelmaker's total sales in August were at 4.98 lakh tonnes, against 5.41 lakh tonnes in July, down 8% m-o-m. In this, the share of exports in August was 1.51 lakh tonnes, showing a m-o-m drop of 6% against 1.61 lakh tonnes in July.

Overall export and domestic sales dropped because of an overall drop in both markets unlike the overall slight positive trend seen in the industry in the previous month.

RINL's exports, in which billets have a substantial share, as with all other mills, took a hit because of port congestion due to quarantine issues, Covid resurgence in many countries and overall drop in China's demand thanks to its production cuts and policy uncertainties.

The domestic market too has been sluggish with traders piling up inventory at their end.

Production remains flat

Consequently, RINL's crude steel production remained almost flat at 4.38 lakh tonnes compared to July's 4.38 lakh tonnes.

Turnover drops m-o-m

Turnover for the month under review, Aug'21, saw a drop of around 5% to INR 2,652 crore compared to INR 2,800 crore seen in Jul'21. Although export realisations were good, volumes did not match the previous month's.

Outlook

The overall market, both in terms of domestic and exports sales, may stay somewhat muted because of lack of demand, and RINL too may be impacted in the current month.

A key importing country for long products, like China, is not buying much at present which will impact Indian mills.