How Did Jsw Steel Perform In Such A Challenging Pricing Environment? | Jayant Acharya |Business News

The quarter three or the year as a whole, I think we had a very uncertain environment. The prices have been at a multi-year low. Ongoing uncertainties globally have also impacted sentiments. In spite of this, I think JSW has been able to deliver a very good operational performance. If you look at our production, our utilization of our capacities have been at 93% excluding our blast furnace 3 in Vijayanagar which is under a shutdown for capacity augmentation. Our sales have grown by about 14% both on consolidated basis and on Indian operations basis. Our domestic sales have grown by 10% at a much faster rate than the domestic market growth. We have also been able to mitigate the price drops in the market through a better product mix. Our value added sales and special product sales have gone up by about 16% to about 4.5 million tons and that has helped us to mitigate some part of the price drops. So all in all a good quarter and I think the outlook also going into the quarter four is quite positive.

So on an absolute number basis, I think we will be close to 163 million tons of demand in India. Last year it was about 152 million. So about an 11 million ton growth, which will be about 7% plus. Our guidance was between 7 to 8%. So I think we are in that range. Going forward we see a growth between 7 to 9% depending on year to year. The next year also looks good with the Indian economy doing well, with the capex cycles being actively taken by the government. I think a lot of investments happening in various other sectors. I think we look forward to a good demand growth in India.

I mentioned that the steel prices were at a multi-year low in the past quarter, not high. So the prices have bottomed out and I think now they have started moving up. So the recovery of the steel price is taking place because I think prices had become unsustainable. It has been aided by the action by the government of India which was a very welcome move on trade measures which they have taken, both on the anti-dumping duty side and on the safeguard side. We have seen a price uptake from second half of December and January. We are also looking at a higher cost especially from coking coal point of view. Seasonal disturbances in Australia have increased the coking coal prices. And there will be an impact of that in the quarter four. Iron ore we expect to be rangebound. So that we expect the steel prices to be able to mitigate the cost impact and deliver some addition to the margins over the quarter gone by.

It would certainly benefit the industry as a whole and I think more important is the fact that the government and the country remains proactive to deal with any kind of unfair trade which takes place. We have to understand and remember that the world has taken various trade measures across many countries. The global uncertainties are quite large. There is excess steel in the market which are looking for a home and India being the fastest growing economy and the fastest growing steel sector is vulnerable. So therefore the actions are very timely and I think it's very important that these actions have been taken and the industry very much welcomes it.