JSW Steel’s new, 1.2 million tonnes (mn t) capacity wire rod mill will take February 2021 to reach full capacity, it is learnt. The mill, which has been recently commissioned, is the largest of its kind in the country, and undergoing trial run at present.
Reliable sources indicated to SteelMint that production from this unit is already at around 4,000 tonnes (t), which would be gradually increased to 10,000 t in the current month of November, 2020. Sources also informed that the material being produced in the trial run have not yet reached markets.
Apart from the new mill, JSW Steel has another existing wire rod mill at Vijayanagar of 0.60 mn t capacity while the Salem plant in Tamil Nadu also produces special wires.
JSW’s total wire rod production in October, 2020 was at around 49,000 t in which exports comprised a little above 5,000 t and domestic despatches were at approximately 46,000 t, sources said.
Nov despatches target lowered
The company has lowered its total despatches target for November, 2020 by a marginal 4% to about 8.9 lakh tonnes (from the planned 9.3 lakh tonnes in October, 2020) from its Vijaynagar plant, in which exports have been kept at around 1.25 lakh tonnes and domestic sales at near-about 7.7 lakh tonnes.
The lowered November target could be related to “production issues”, a source informed, declining to elaborate.
It may be mentioned that the actual sales achieved in October, 2020 were lower from the targeted 9.3 lakh tonnes, at 8.5 lakh tonnes. The October target, in any case, had been revised downward further from 9.5 lakh tonnes.
The October downward revision, sources informed, was also on account of “production issues”. The plant is operating at 85-90% capacity, due to furnace-related factors. Of the four blast furnaces at the Vijayanagar plant, one needed to be on 4-5 days of maintenance due to heat problems, it is learnt. Therefore, total despatches achieved in the previous month were 92% of the target.
October 2020 saw exports straying marginally from the targeted 1.2 lakh tonnes to around 1.15 lakh tonnes. but which was a month-on-month decrease of 23%, in line with the overall industry trend of no or negligible export bookings, what with the domestic market looking up. Domestic sales in October, at 7.38 lakh tonnes, were slightly up from 7.24 lakh tonnes in September, 2020 but down from the planned 8.10 lakh tonnes.
Lower net profit in Q2
Meanwhile, JSW Steel declared its quarterly results recently, whereby its net profit fell 37% to INR 1,595 crore in the second quarter (July-September, 2020). A tax expense of INR 910 crore in Q2 led to a lower net profit although operationally the company reported a strong quarter due to a revival in steel demand.
Crude steel production for the quarter stood at 3.85 MnT. Also, as domestic demand revived, the company lowered its exports volumes to 28% from 57% in Q1 (April-June, 2020).
~ Madhumita Mookerji
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