SAIL expects steel prices to firm up in coming months on rising demand. SAIL Chairman, Mr C.S.Verma said the company is seeing a pick up in demand, which should accelerate post-monsoon.

“We expect prices to remain stable and firm up on growing demand,” Mr Verma told reporters after the Company’s 39th Annual General Meeting. Steel prices have relatively stayed firm despite a subdued demand in recent months.

Addressing shareholders, Mr Verma said coking coal prices, which shot up in the aftermath of Australian floods early this year, have begun to ease. Coking coal prices, which hit a high of $330 per tonne in January have now come down to a level of $280 per tonne in the current quarter.

SAIL’s profitability in 2010-11 was heavily impacted severely due to the sharp rise in coking coal prices. The company had to bear a cost increase of 66 per cent in last fiscal.

The SAIL scrip shed over 5 per cent to close at Rs 107.60 on the BSE on Thursday.

Mr Verma said the company’s joint venture plans with Kobe Steel of Japan were progressing well and the pre-feasibility study had been completed. Similarly, the proposed joint venture with Posco is on the verge of finalising the draft project report, he added.

SAIL is currently undertaking a modernisation and expansion plan which would enhance its capacity to around 24 million tonnes per annum from the present 14 million tonnes. As part of the company’s Lakshya vision, it plans to ramp up capacity to 45 to 60 million tonnes by 2020, Mr Verma added.

On the company’s proposed follow on public offer, Mr Verma said “We cannot talk of FPO in the current choppy market conditions. We are waiting for good times”.

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