The drop in net sales realisations, coupled with the increase in coking coal prices since July, has led to an operational cash deficit at India’s public sector steelmakers, which has been met by increased borrowing, India’s steel ministry says.

The -20.3% on-year reduction in net sales realisations at Steel Authority of India in the fiscal year through March 2016, for example, impacted profit by INR 8,392 crore ($1.23 billion). Minimum Import Price (MIP) and anti-dumping duties have seen Indian domestic steel prices improve throughout 2016, but Indian BF-based steelmakers have been hit by increased coking coal prices.

India’s public sector steelmakers have thus increased borrowing from the market and banks to a combined INR 35,144 crore (5.15 billion) as of 31 October 2016 compared to INR 29,898 crore twelve months earlier, the ministry says.

India has just extended MIP on imports of 19 steel products, all coated flat products, until 4 February 2017 (see separate Kallanish story).