SAIL chief says steel prices have hit a ceiling

NEW DELHI: India's second largest steel producer Steel Authority of India (SAIL) sees no scope for further increase in steel prices. Its chairman and managing director S K Roongta, however,  foresees a robust demand in the domestic market. The steel major plans to ramp up its capacity to 24 million tonnes from the present 12.6 million tonnes by 2021.

With India's GDP growing at 9%, demand for steel will accelerate, said Roongta, adding that the steel sector is likely to witness a growth rate of 12-13%.

Roongta said steel prices were 16-20% higher this year than last year. "I think prices are at a firmed up level. I don't see any scope for further rise. It is healthy for the industry and consumers if prices stabilise at this level," he said.

Strong demand, market-driven product mix, higher value-added special steel production have helped SAIL achieve a 72% increase in profit after tax at Rs 1,902 crore for the January-March 2006-07 quarter compared to same period the previous year. Announcing the highest-ever turnover and profit before tax, Roongta said the company has set in motion the process for preparing a perspective plan beyond 2021.

"Upgradation schemes for Rourkela and Durgapur will be considered shortly," he said.

SAIL's annual turnover rose 21% to Rs 39,189 crore during 2006-07 and PAT rose 55% to Rs 6,202 crore. With this, the board has recommended 31% dividend amounting to over Rs 1,280 crore including a 16% interim dividend announced in March 2007.