Steel Authority of India today reported a 29 per cent dip in Q1 FY'12 net profit at Rs 838 crore on costlier coking coal,a key steel-making ingredient,though the sale of the alloy was 18 per cent higher over the year-ago period. Attributing the dip in net profit to higher coking coal prices,SAIL Chairman C S Verma said that during the quarter under review,it had to bear a Rs 580 crore additional burden because of expensive coking coal. The cost of the vital raw material rose to USD 330 per tonne from USD 200 a tonne in the first quarter of last fiscal. The state-run company had registered Rs 1,177 crore net profit in the same quarter last fiscal on a gross sales of Rs 9,931 crore. During the current quarter,it recorded Rs 11,891 crore gross sales on higher dispatch,which stood at 2.75 MT. Verma said the price of coking coal was higher because of floods in Australia,which supplies a lion's share to global export market. Around 60 per cent of SAIL's total 10.5 MT imports of coking coal comes from Australia. Hit hard by the increase in coking coal prices,SAIL's raw material consumption during the quarter rose to Rs 5,229 crore against Rs 4,702 crore in the same quarter last fiscal,though the production of saleable steel remained same as in the corresponding quarter's level at 3.044 MT. Verma hoped coking coal price to come down as the current price level was not sustainable. "The existing price of coking coal is not sustainable. It might start to fall towards the end of the current quarter. It should be come down to around USD 250 a tonne in the next two -three months," he said. Anticipating steel demand to grow in the coming quarters,Verma said the cost of raw materials would also ease resulting in a better realisation for the company.
