SAIL prioritises capacity expansion, raw material security for FY25

The Steel Authority of India (SAIL) is gearing up for a transformative year in FY25, with a strategic focus on expanding capacity and securing raw material resources to solidify its position in the steel industry, the company said in its FY24 annual report. The company flagged that it will look into blending domestic coal for operations to reduce reliance on imports and protect its bottom-line from supply chain shocks.

As the infrastructure-led domestic demand remains robust, SAIL is looking to expand the crude steel production capacity from the existing 19.10 million tonnes per annum (MTPA) to 35.65 MTPA by the year 2031. "At SAIL, we are on track to excel in two focus areas: to maximise capacity utilisation and to provide the best
value to our customers in order to safeguard against the vagaries of market fluctuations," chairman Amarendu Prakash said in a note to shareholders.  The comments come as the domestic steel prices plunged over a three-year low weighed down by rising inventories and globally weak prices.

The outlook for the Indian steel market remains challenging in the short term, with continued downward pressure on prices likely, analytics firm BigMint wrote in its note published on September 2.

Prakash highlighted that business at SAIL was impacted by "several macro-economic challenges like upcoming new capacities, trade measure initiatives, inflationary pressures, supply chain disruptions, interest rate hikes by central banks, and moderating demand in China resulting in pressure on pricing and excess availability of steel products."