NEW DELHI: Steel behemoth Steel Authority of India Ltd, which is banking on a sharp rebound in demand from infrastructure projects and a surge in exports to sail through the tough pandemic-hit year, has also decided not to scale down its target of producing 50 million tonnes (mt) of steel by calender year 2030.“We have seen a surge in export orders after the lockdown was ordered… Unexpectedly China, which everyone expected would try to flood the global markets with cheap exports, has turned importer. We are selling some two lakh tones to China during this period, besides meeting orders from UAE, East Africa, South and South East Asia,” said Anil Kumar Chaudhary, Chairman of SAIL in an interview with this publication.
Analysts say China is stepping up investments in infrastructure projects as part of its stimulus to beat the Coronavirus-driven slowdown. Between January to April 2020, for instance, China approved nine airport projects with a total investment of $14.1 billion, equivalent to 55 per cent of total approvals made in 2019, according to an S&P Global Platts analysis.
SAIL is not well known as an exporter, exporting just 1.18 million tones out of a total output of 16.15 mt of steel. However, nimble footed marketing helped the steel-maker sell about a fourth of the its production in May in markets abroad, mainly by hooking on to China’s demand surge.“The Indian Steel Association has projected domestic steel demand will constrict by 7.7 per cent. However, I have differences with that. My reading is that domestic demand may remain flat but not dip. As part of the stimulus, the government will try and rush through infrastructure projects including railways and power, affordable housing, agricultural infrastructure, upgrade airports… these should more than make up for the slack in demand from other sectors,” said Chaudhary.
“We are not scaling down our target of increasing steel production to 50 mt in 10 years,” added the chief of the `67,000 crore-turnover steel giant. SAIL produced about 21 mt of saleable steel last year.Most rating agencies are agreed that the new fiscal measures announced by the Centre as part of its `20 lakh crore package to resuscitate the economy amounts to about `1.8 lakh crore. However, earlier budgeted spending and an influx of `11 lakh crore of liquidity through bank credit is expected to help push projects which state governments and public sector enterprises, besides some private enterprises, come up with.