New Delhi: With the rupee hitting new lows against the US dollar almost on a daily basis, Steel Authority of India (SAIL) on Monday said that for every Re 1 depreciation, on an annual basis, the company may have to take a Rs 125-130 crore hit.
The only saving grace could be the dipping price of the coking coal, a key input in steel-making, which SAIL requires to import around 10 million tonnes a year to fire the blast furnaces.
"It is difficult to gauge total impact of depreciation of rupee on the company on an annual basis. But, according to a very rough estimates, every one rupee depreciation will have Rs 125-130 crore impact on the company," SAIL Chairman C S Verma said.
The Indian rupee has seen unabated fall against the US dollar. Its value has gone down by almost 12 percent since the start of May. It dipped to a record low of 61.21 today, before recovering to close at 60.61.
SAIL imports around 70 percent of its coking coal needs. A majority of them come from Australia and the US. The company has been making efforts to strengthen its captive supply, but that make take some time to actually fructify.
Meanwhile, the need for imports of coking coal would go up further with SAIL jacking up its steel-making capacity to 19 million tonnes per annum (mtpa) by the end of the current fiscal from 14 mtpa now.
Coking coal prices have softened sharply to hover around USD 130-140 a tonne now, from USD 300 a few months ago. This is largely because of increased supply.
First Published: Monday, July 08, 2013, 20:08