SAIL's inventory stands at about 0.5 tonne, which would be needed to cater to their vast marketing network of more than 3000 dealers.
He further adds that improvement in China's economic data too was responsible for steel environment improving. "In calendar year 2012, China's growth in crude steel production was about 2 percent but from January to July 2013 China growth of crude steel production was about 7 percent."
Below is the verbatim transcript of his interview on CNBC-TV18
Q: What kind of price hikes have you taken at SAIL and what are your current inventory levels?
A: From the beginning of the current month, we increased the prices for flat products by about Rs 1500 per tonne and in the long product segment by about Rs 1000 per tonne. This is in line with the international price levels because internationally too the prices have gone up in the last two months by about USD 20 per tonne for flat products and by about USD 4-5 per tonne for long products.
Last four-five months there has been stagnation in price level whereas the input prices have firmed up with passage of time. International iron ore prices which had fallen to a low of about USD 95 per tonne about three-four months back, today they are around USD 140 per tonne.
Even the coking coal prices have firmed up by about USD 10-15 per tonne in the last couple of months. Since the steel prices had been stagnant in last four-five months, this increase has been effected from beginning of the current month.
As far as inventory level is concerned we are holding about 0.5 million tonne of inventory in all our stock yards. Looking at our vast marketing network wherein we have about more than 3000 number of dealers and about 54 warehouses in India. So this inventory level will be needed to cater to our marketing network.
Q: You don't feel the rise in prices has impacted demand in any fashion?
A: No, in fact demand has gone up. I also think the worst is over as far as metal or steel industry in particular is concerned.
To be more data specific, in the year 2012 globally, growth in crude steel production was 0.7 percent at 1.5 billion tonnes. From January to July 2013 of the current calendar year, the growth has gone up from 0.7 percent to 2.1 percent.
Even China growth is coming back. For example in calendar year 2012, China's growth in crude steel production was about 2 percent but from January to July 2013 China growth of crude steel production is about 7 percent. India's growth in crude steel production for the first five months of the current financial year is about 5 percent. So now that worst scenario seems to be over and steel industry being a metal industry and is subject to cyclic movement, I think now there are good times ahead for us.
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