Prices of steel-making raw materials such as iron ore and coking coal are expected to soften in the short term as a result of the situation in Japan, said Steel Authority of India Ltd (SAIL) on Tuesday.

“The demand for coking coal will be about 10 million tonnes less monthly (due to impact of tsunami on Japan). So there will be some impact on prices. It has to be contained and should come down,” the SAIL Chairman, Mr C.S. Verma, told reporters on the sidelines of a steel conference.

“There must be some impact on iron ore prices as production from Japanese steel companies are expected to come down in next one to two months,” he added.

However, he did not give an indication as to how much would be the fall in raw material prices and added that in any case coking coal prices at the current levels of $300-plus are not sustainable.

The SAIL Chairman also said that Indian steel companies will be ready to export if Japan imports steel as part of its rebuilding exercise.

Follow-on Offer

On SAIL's follow-on public offer, Mr Verma said that the company will file the draft red herring prospectus in May and the issue could hit the market in the first quarter of the next fiscal.

Sets higher targets

The steelmaker also signed its memorandum of understanding (MoU) for the year 2011-12 with the Government of India. According to the MoU, SAIL plans to achieve higher saleable steel production than planned for 2010-11 by utilising more than 114 per cent of capacity. The company has maintained its thrust on production of special/value-added steels and also plans to produce higher volumes than planned for the previous year. Gross sales projections are over 4 per cent higher than planned for FY '11.

The company has also put a thrust on R&D expenditure with 1.1 per cent of the gross margin being earmarked for R&D. SAIL has identified seven key projects in this area and targeted 27 new patents.

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