Steel major JSW Steel is looking at around 20% decreased export plan and a concurrent 5% increase in its domestic sales for the month of October, 2020 over the previous month of September, from its flagship Vijayanagar plant, SteelMint has learnt from market sources.
While the total despatch volume plan from this plant for October is the same as in September, 2020, at around 9.5 lakh tonnes, export volumes have been reduced from 1.3 lakh tonnes in this month against the planned 1.6 lakh tonnes in the previous month while domestic despatch volumes have been upped to over 8 lakh tonnes against the planned less than 8 lakh tonnes in the previous month.
September sales
In September, however, actual exports were down by 5% at 1.50 lakh tonnes against the targeted or planned 1.6 lakh tonnes. Actual domestic sales in September were down 8% against the targeted 7.9 lakh tonnes.
Overall, this plant is running at 90-92% capacity.
Decreased exports
If we track from July, 2020, JSW Steel’s export volumes have been steadily decreasing from actual 3.9 lakh tonnes in this particular month, to 2.5 lakh tonnes in August and then 1.51 lakh tonnes in September, followed by a planned 1.3 lakh tonnes in the current month of October.
In June, the export volumes had remained quite elevated at 3.7 lakh tonnes and domestic sales were at a mere 2.9 lakh tonnes, but in this month, the plant had been badly hit by a COVID-19 outbreak that had jeopardised targets.
The sustained drop in exports is part of a larger vision of JSW Steel to lower exports to 15% of total despatches by the end of the current financial year of 2020-21 with an eye on increased domestic sales.
Margins
Better margins are available in the domestic market with the mills in general being able to earn over INR 4,000 more per tonne against export sales in September, trading sources inform, which is encouraging the mills to focus more on the home market.
Dull trend
In fact, traders have been experiencing an overall lull in terms of exports in September after shipments hit a record high of 2.44 million tonnes (MnT) in July. In fact, JSW Steel was one of the few to have been active in the exports market in September, it was learnt.
August set the tone for a subdued exports trend with data pointing to a possibly far more sober 1.65 MnT of overseas shipments, a month-on-month decrease of 32.37% over July. September export volumes may hover around 1.5-1.75 MnT and October also is set to experience a dull export season with the domestic market looking up since the lockdown is being lifted in phases.
-Madhumita Mookerji
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