SAIL flags Chinese dumping threat, pushes Mozambique coking coal sourcing plans
“Action is being taken to increase vendor base through EOI route and increase coal basket by exploring new coal producing countries from different geographies like Russia, Mozambique, etc,” it said.
Steel Authority of India Ltd (SAIL) has flagged the surge of Chinese steel exports; and implementation of CBAM (Carbon Border Adjustment Mechanism) in Europe as a key risks to domestic price movements, even as it pursues overseas raw material projects – mostly securing coking coal (a key steel-making raw material) from Mozambique.
Moreover capacity expansion by private players are eroding market share in both commodity and value-added steel segments, it pointed out.
The State-run steel-maker reiterated that its capex commitment for FY26 stood at ₹7500 crore that include de-carbonisation drives, but warned that lease expiries on captive mines could impact raw material security and delay project execution.
Lease expiries have already created bottlenecks.
For instance, the extension of forest clearances for Chattisgarh’s Rajhara Hils and Pandridalli’s iron ore leases were required to secure operations till 2043. SAIL also pointed out delays in approvals from Jharkhand for selling iron ore in the open market.
“The lapse of mining leases in some States poses a risk to assured raw material availability, which may impact long-term capex execution timelines”
Global headwinds
“The continuing weakness in global steel demand, especially in Europe, coupled with large-scale exports from China, remains an area of concern,” the company noted.
Surplus production in China, alongside Europe’s decarbonisation-led slowdown, has depressed prices. SAIL said this trend poses an indirect threat to Indian exports and global trade flows.
“The global steel industry experienced significant turbulence during the year. Surplus production and sluggish domestic demand in China led to an export surge, adversely impacting global steel prices,” it noted.
In the S-W-O-T report, SAIL said, “dumping of Chinese steel in global and Indian markets creates a surplus environment, undermining local profitability.” Structural overcapacity in China and Europe fuels “competitive dumping into India” thereby disrupting “local demand – supply balance”.
Overseas mining push
The company is advancing plans abroad.
Mozambique is seen as a long-term hedge to secure supply of both iron ore and coking coal.
“Action is being taken to increase vendor base through EOI route and increase coal basket by exploring new coal producing countries from different geographies like Russia, Mozambique, etc,” it said.
Minas de Benga Limitada (Mozambique) (MBL) is a foreign joint venture company of International Coal Ventures Pvt. Ltd. (ICVL) (a joint venture of SAIL, RINL, NMDC, CIL and NTPC); is engaged in the business of producing and supplying coking coal in India. The steel-maker has entered into a long term supply contract with MBL for supply of coking coal quantity on annual basis. The aggregate value of the transactions “is estimated up to ₹1,500 crore”.
Out of SAIL’s 18.74 million tonnes (MT) requirement in FY25, only 2.4 MT was sourced domestically, with 16.3 MT imported.
Financial performance
In FY25, SAIL recorded a turnover of ₹1,01,716 crore, a near 3 per cent y-o-y decline primarily due to lower net sales realisation. Net profit was ₹2,148 crore.
The debt–equity ratio stable at 0.66 in FY25, and net worth rose to ₹55,656 crore.
Published on September 1, 2025
