Public sector Steel Authority of India Ltd (SAIL) has achieved the best-ever annual steel production in the year ending March 31, closing the gap with private sector peers JSW Steel and Tata Steel.

The crude steel production of SAIL stood at 18.289 million tonnes(mt) in 2022-23, representing a growth of 5.6 per cent over the previous best which was recorded in the fiscal before.

SAIL’s production translates to a capacity utilisation of about 88 per cent as the PSU’s crude steel capacity stands at 20.63mt. FY23 also stands out given that the PSU Maharatna managed to extract the maximum benefit out of its assets after the last round of expansion which went on for a decade.

While the two of its competitors are yet to come out with their annual production numbers, the Indian production of Tata Steel and JSW Steel is likely to be over 19.5mt and 23mt respectively in FY23.

The last fiscal is also marked the highest hotmetal production by SAIL with 19.409mt, an uptick of 3.6 per cent over the previous best.

The numbers augur well for the public sector behemoth as it is toying with the idea to raise crude steel production capacity to 35mt by 2030-31, in line with the Indian government’s ambitious plan to achieve 300mt production by the end of this decade.

The proposed scale of indicative investment by SAIL to reach the capacity of around 35mt of crude steel will be around Rs 1,10,000 crore, according to a written reply given by the minister of state for steel Faggan Singh Kulaste in the Rajya Sabha on August 8, 2022.

Bengal plants shine

Durgapur Steel Plant (DSP) and IISCO Steel Plant, Burnpur of SAIL posted their best-ever physical performance in FY23 in tandem with the overall performance of the parent.

The hot metal and crude steel production at DSP was 2.57mt and 2.29 mt, respectively. They were higher by 5 per cent and 3 per cent over the last year. On both counts, the capacity utilisations were more than 100 per cent.

Similarly, ISP also posted the highest-ever hot metaland crude steel production which stood at 2.59mt and 2.42mt respectively. They were higher by 8 per cent and 9 per cent over the previous year. SAIL plans to expand the capacity of ISP, Burnpur by 4.5mt as part of the company’s next phase of the expansion project.

Steel market

Domestic hot rolled coil prices in the traders’ market fell Rs 1,350 per tonne week-on-week to Rs 58,400 a tonne mainly due to relatively subdued demand compared to longs in Q4FY23, ICICI Securities in a note said.

The brokerage pointed out there has even been some destocking in the domestic market ahead of steel price revision by the mills, indicating there are expectations of prices merely getting rolled over.

CAPACITY UTILISATION AT 88%

• Crude steel output grew 5.6% at 18.28mt in the last fiscal, an all-time high
• Hot metal production also reached a peak of 19.4mt, an increase of 3.6%
• PSU mulls raising capacity to 35mt by 2030-31, in line with government’s plan to hit 300mt output
• Durgapur Steel Plant and IISCO Steel Plant also reported their highest-ever output