S.K. Roongta in New Delhi on Friday. (PTI)

New Delhi, Oct. 30: Steel Authority of India will reduce prices of flat products by at least Rs 500 a tonne even as lower prices pulled down its second-quarter bottomline by 17.2 per cent.

“There is a need to reduce the prices of flat steel products in line with softening international prices. Long steel prices in India are also under pressure. The reduction could be higher than Rs 500 per tonne,” SAIL chairman R.K. Roongta said. Global steel prices have softened by about $50 a tonne because of increased production by China.

SAIL today said the Jharkhand government had given an in-principle approval for the renewal of the Budhaburu mining lease, the biggest of Chiria and Gua’s iron ore leases.

Budhaburu — with reserves of about 810 million tonnes of iron ore spread over 823.8 hectares — was considered key to SAIL’s immediate raw material needs. SAIL officials said they were in talks with the Jharkhand government to renew the other leases in the Chiria-Gua region to meet the company’s requirements for its massive expansion plans.

The leases on Ajitaburu and Sukri-Latur in Chiria and Jhilingburu-I in Gua are yet to be renewed. SAIL has 11 iron ore mining leases in the state. Besides the leases on Ajitaburu and Sukri-latur in Chiria and on Jhilingburu-I in Gua, which are under litigation, the company also holds leases over I, II and III of Kiriburu-Meghataburu, Budhaburu and Dhobil of Chiria and Jhilingburu and Topailor of Gua, which are under deemed extension.

The Indian steel maker’s net profit has declined 17.2 per cent to Rs 1,663 crore during the second quarter from Rs 2,009.60 crore in the year-ago period. Turnover during the quarter stood at Rs 10,730 crore, which was 20.8 per cent lower on a year-on-year basis.

Roongta said cost savings of Rs 100 crore had helped to offset the impact of a price squeeze.

Cost cuts were effectively made in energy consumption, blast furnace productivity, financial management, repair and maintenance costs and administrative expenses.