Sunday, Feb 22, 2004
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By Our Staff Correspondent
KOLKATA, FEB. 21. Taking a cue from the global trend, the Steel Authority of India Ltd. may shift its focus from long term contracts to spot sales. Admitting that the domestic steel prices have already crossed the 1996 levels and were now heading for a `historic high,' SAIL director (commercial), S. K. Roongta, said long terms sales contracts might prove counter productive for the company as the raw material and logistics prices were extremely volatile. "In a volatile market, long term contractual price agreements might fall short of covering the cost increases.'' Mr. Roongta, however, assured that contractual sales would continue. "For example Railways purchases are always on annual contracts,'' he stressed. Stating that the company is yet to finalise its annual cost budgeting for 2004-05, he said spiralling of coking coal prices in the global market coupled with soaring sea freight, would be a major cause for concern for the company as well as the industry. While the perspective investment plan for 20 million tonnes production by 2010 is yet to be finalised, SAIL plans to stretch production by another one million tonne in the next fiscal by way of `de-bottlenecking measures.' To this effect all the seven blast furnaces in Bhilai and Bokaro are brought into streams. To ensure higher realisation the share of value added special products would be enhanced. During the current fiscal, domestic sales have increased by 12 per cent.
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