JSW Steel to Commence Operations at Two Iron Ore Mine Blocks in Early FY19

JSW Steel – India’s largest steel producing company conducted Q3FY18 investor conference call today for quarter ended Dec’17. The company officials have a positive outlook for 2018 in terms of government announced projects related to infrastruture, metros, roads and highways ets. Below are the highlights of the investor conference call.

1. Company reported highest ever operating EBIDTA in Q3 FY18 at INR 3,573 crore, up 29% Y-o-Y. Revenue from operations moved up by 13% Y-o-Y to INR 16,453 Crore.
2. Highest ever Crude steel production recorded at 4.11 MnT in Q3 FY18, up 7% Y-o-Y and highest ever saleable steel sales of 3.97 MnT by 9% Y-o-Y.
3. 2018 is expected to be strong year in terms of govt announced projects. Rebar demand has been strong amid projects of metros, roads & Highways, River linking, bridges and infrastructure push from govt. India’s steel demand growth improved in Q3FY18 largely due to the base effect .However steel consumption is expected to grow strong on back of government’s push for infrastructure spending and strengthening consumer demand.
4. Steel prices increased by about 5-6% in Jan’18 and expect prices to increase and be sustainable in the coming months.
5. Imports of coated steel to India remain a matter of concern. Import of coated steel to India increased 107% in first 9 months of FY18 and color coated imports increased by 250% amid increase in imports of substandard coated steel. Share of imports from China, Japan and Korea constituted 70% of total imports. Govt has introduced BIS in color coated this month. JSW Steel coated products registered a production volume of 0.35 MnT and sale volume of 0.51 MnT. Volumes were impacted by planned shutdown of its two galvanizing lines at Tarapur works for maintenance and revamping to enhance production capacities.
6. The company focussed on increasing export sales volume up 24% Q-o-Q especially for long products to leverage upon a robust demand and pricing environment in international market. Exports went up by 66% Y-o-Y. Q3 FY18 exports were at 1.19 MnT and around 3 MnT in 9 months of FY18.
7. Expect 2 ‘C’ category iron ore mine blocks that won in auctions to become operational in early FY19 which has limit of 0.71 MnT pa. Once all 5 iron ore mine blocks become operational JSW will be able to extract 4.71 MnT pa of iron ore.
8. Seemed optimistic related to acquisition of Bhushan Steel and Monnet. Financial bids have already been submitted for Monnet.
9. Auction of 8 new C category iron ore mine blocks in Karnataka are in pipeline. Last date for bid submission is in Mar’18.
10. NITI Ayog had submitted proposal uniform iron ore pricing policy in India, but no improvement has been seen regarding it.