JSW Steel Expects Pricing & Demand To Be Better In H2FY25 | JSW Steel Q2 Results Outlook

Quarter 2 was a challenging quarter. As you said rightly, the international prices were weaker, and that resulted in domestic prices also reflecting the same. We were able to manage that through offsetting through cost, and that gave us a similar EBITDA to what we had for quarter 1 as well. The Indian operations did quite well. I think the Indian operation production was the highest ever, the domestic sales was the highest ever. The EBITDA was actually a little better for Indian operations during the quarter. Our international overseas subsidiaries had their challenges with respect to the pricing environment as well as a shutdown which was there in Ohio for maintenance. But I think on the exceptional item which you asked, this is with relation to a mine in Odisha, which is the Jajang Iron Mine, which we decided to surrender because it was becoming uneconomical to use this low grade which is left in the mine. And that is why we decided to surrender that, and we have taken a provision to that extent in our books in quarter 2.

It will be positive. Basically, because this particular mine was of a very low grade which was not economically viable to use because the specifications did not result in a cost advantage, so therefore we decided to surrender it. We have other mines which are able to provide a better quality which is required by us. So therefore, surrendering this mine won't have a negative impact. Actually, it'll have a positive impact because the quality of the alternate material will be better.

So, China basically has been a key player in the international market. As you are aware, China exports have increased by about 20%-plus in the first nine months. However, the China stimulus announcement has been positive. That has been taken well by the market at large, not only the stock market, but I think the commodity markets also reacted positively to it. Steel prices also reflected an improvement. We saw a similar improvement in India. The prices in the month of October went up after bottoming out in September. H2 being a seasonally stronger half, we expect that the pricing environment will be better. We see from a cost-positioning point of view our coking coal costs are going down. Last quarter, our coking coal cost went down by about $27. We expect in this coming quarter also the coking coal cost to go down by $20 to $25. It's through one is the international prices went down, and the other one is that we changed our blend and sourcing to make it more sustainable. So therefore, we are benefiting on the cost. We expect slightly improved prices. We have increased the prices by 1,000 to 2,000 rupees in the month of October on different products, so we expect that to sustain on seasonally strong quarters ahead.

I would not like to comment on EBITDA per ton or on spreads specifically, but let me put it this way: we have new capacities which are coming on stream. JSW's blast furnace has been commissioned, the SMS is under commissioning, and we have seen the BPSL capacities getting completed. So in the second half, our volumes will be much higher. Therefore, our guidance of sales and production, whatever we have given, we stand by that. So increase in volume will result in increase in absolute EBITDA, and that will improve the overall profit of the company. It will be difficult to comment on the spread at this point of time.