Posted on 21 Jul 2022
Steel output and sales at India's private-sector Jindal Steel and Power (JSPL) fell on the quarter in April-June because of a maintenance shutdown at its Raigarh plant and "challenging market conditions" arising from an export tax.
Its output fell by 6pc from the previous quarter to 1.99mn t, while sales dropped by 16pc to 1.74mn t. Production dipped by 1pc on the year, while sales rose by 8pc from a year earlier when a second wave of Covid-19 infections weighed on output and boosted exports.
JSPL also had lower direct reduced iron (DRI) production at its Angul plant in Odisha because of reduced thermal coal availability, besides the shutdown at the Raigarh plant in Chhattisgarh, it said. The Raigarh plant has a capacity of 3.6mn t/yr and the Angul plant has a capacity of 6mn t/yr.
JSPL does not have any shutdowns planned for the April 2022-March 2023 fiscal year, managing director VR Sharma said, adding the company will go for intermittent shutdowns whenever required such as in case of lower thermal coal availability or any breakdown at its plants.
The government's imposition of a 15pc export tax on several steel products in late May weighed on JSPL's sales. "Both our domestic and export volumes have been impacted during the quarter," it said. "Our domestic volumes were lower by around 12pc and our export volumes were lower by around 28pc during the quarter."
But the steelmaker will maintain exports at over 20pc this fiscal year.
"Europe is starving for material. They want any quantity… but the international prices are also under pressure with 15pc export duty," Sharma said. "There are certain customers for the value-added grades, they still prefer to buy from India, and those material are not impacting the Indian economy because these are specialty materials."
The duties have softened domestic and export realisations by 15-16pc for June and July, JSPL said.
The impact of lower input costs can be seen after 15 August, it said. Demand during the monsoon season will remain low because of slow construction activity, and international markets need to stabilise too, JSPL added.
State-controlled iron ore producer NMDC has steadily decreased its domestic iron ore prices by over 2,000 rupees/t ($25/t) since the duties were imposed in late May. The Argus premium hard low-volatile coking coal index stood at $254/t cfr east coast India on 19 July, lower by 37pc on the month.
JSPL said it will put the Utkal coal mine, one of four thermal coal mines it won in auctions this year, into operation before 31 March 2023.
Source:Argus Media
