India's Sail sees steel prices falling with export tax

The company posted its highest crude steel production in the 2021-22 fiscal year ending 31 March at 17.4mn t, higher by 14pc from a year earlier, with saleable steel sales at 16.2mn t that were up by 8pc. Its exports accounted for about 8.6pc of total sales in 2021-22.

The Indian government on 21 May announced an increase in export duties on nine steel products to 15pc from zero, including pig iron, hot-rolled and cold-rolled products, but exempted semis.

"We have got certain orders and we are evaluating what to do about it," Sail said. "Our exports are comparatively less, so not much of an impact is expected because of this. But yes, the extra quantum which will come into the country will surely put some pressure on the prices," adding that is has an advantage as it exports a lot of semis.

Sail could also benefit from the policy, as if prices come down it can see higher demand and that can turn out to be "a silver lining in the cloud". But it also voiced scepticism regarding the timeline of the policy. "Whatever policies the government has introduced… they will last for the entire year, or they may come out with some stops for us. We really do not know."

Indian domestic hot-rolled coil dropped to 69,000 rupees/t ex-Mumbai on 20 May, down by 5pc from a year earlier, with sluggish demand.

Sail said it was too early to comment if the policy will defer its expansion plans, as in the short term it has only rehabilitation and debottlenecking plans. It will continue with investments in its current plans and assets.