Posted on 02 Jun 2022
Indian private-sector producer Jindal Steel and Power (JSPL) said it will maintain its export levels in the current 2022-23 fiscal year ending 31 March as it is only minimally affected by the country's new export duties.
JSPL plans to produce 8.5mn-8.6mn t of steel during 2022-23 and sell about 8.2mn t with exports accounting for 2.5mn t, which is about the same volume as 2021-22.
The Indian government announced an increase in export duty on nine steel products to 15pc from zero, including pig iron, hot-rolled and cold-rolled products, effective from 22 May to curb inflation and increase domestic availability.
JSPL said it is insulated from the export duties to a certain extent because of its unique product mix that includes structural steel, rails and wire, which have not been taxed.
It forecasts of the 2.5mn t of exports in 2022-23, at least 2mn t will be duty free and it will try to produce 500,000t of value-added products for customers willing to pay 15pc of duties or a little less.
The company also said it will not export wire rods and rebar because it affects government projects and general house builders.
The export duties have raised concerns about domestic steel mills' capacity expansion plans, although JSPL said it is at a point where "there is no U-turn" with regards to capital expenditure. It will continue with its expansions as it believes the government policy changes are temporary.
The government also announced the removal of import duties on coking coal, ferronickel and steep export tax hikes on iron ore concentrates and pellets that will reduce input costs.
JSPL will benefit by around $60/t from the duty changes on raw materials. It said it is buying pulverised coal injection grade and anthracite coal from Russia and purchasing the rest from its mines in Australia, South Africa and Mozambique.
The company recently won four coal mines — Utkal C, Utkal B1, Utkal B2 and Gare Palma IV/6 — in domestic auctions and expects to produce 6m-7mn t/yr from these mines and up to 12-15mn t/yr in the long term.
Source:Argus Media
