SAIL plans to raise its crude steel capacity to 50MT by 2030
2021-09-22
Sep. 22, 2021 - SAIL has started work on the land bank study for the next phase of expansion, SAIL chairman Soma Mondal said in a letter to shareholders earlier this month. The firm recently announced plans to raise hot metal production capacity at its Rourkela steel plant.
SAIL produced 15.215 million ton of crude steel in the FY2020-21 ending 31 March and 16.155 million ton in FY2019-20. The fall in output in the last financial year was the result of disruption caused by Covid-19. Prior to the pandemic, the firm's output had risen by just over fifth between FY2011-12 and FY2019-20.
Strong cash generation due to higher steel prices and balance sheet strength will continue to support the funding requirements of long-term growth plans of steel companies.
Focus on infrastructure and government initiatives such as ‘Make in India' are expected to boost steel demand growth. In addition, the government's focus on accelerating the rural economy and plans for building smart cities, affordable housing and dedicated freight and high-speed rail corridors are expected to create significant demand for steel.
The world's leading steel producer, China, has removed rebates and imposed export taxes on certain steel products this year to discourage exports owing to high domestic demand. The country is also looking to cap steel output in efforts to reduce carbon emissions.
Indian steel mills have benefited from this move, with most companies registering higher sales, which have been supported by increased exports.