Seven Things SteelMint Learned from JSW Steel’s Investor Conference Call

JSW Steel today reported its results for Q3 FY17. Company’s crude steel output moved up 43% Y-o-Y to 3.86 MnT in Q3 FY17. Also. Its saleable steel sales recorded increase of 43% Y-o-Y in Q3 FY17 to 3.64 MnT. In its consolidated performance, company’s operating EBIDTA was at INR 2,867 crores in Q3 FY17.

Q3 FY17 witnessed volatility and turbulence in Indian steel industry over factors like – Currency Demonetization and sharp hike in raw material prices. However company is expecting some positive move in the upcoming Budget.

Below are the key highlights that we learnt from JSW Steel’s investor conference call conducted today (31 Jan’17):

1. Provisional Anti-Dumping duty to be extended for 2 more months- Provisional Anti Dumping Duty on HRC & CRC likely to be extended for 2 months until its final determination.

2. Indian steel imports increased sharply in Dec’16 – Steel imports to India have seen substantially increased in Dec’16 by 33%,M-o-M as compared to Nov’16. Despite imposition of MIP,steel imports have gained the momentum in this quarter, following which they may analyze and request govt. for suitable measures.

3. Japan & Korea FTA Agreements under review – Regarding renewal of India-Korea Comprehensive Economic Partnership Agreement (CEPA) and Indo-Japan Comprehensive Economic Partnership Agreement, it was said that their are chances for reviewing the FTA’s.

4. Regarding inorganic growth strategies – JSW Steel is evaluating both organic & inorganic growth strategies. They will consider cost & synergy turnaround before evaluating the opportunities. There are chances that JSW Steel, Dolvi may ramp up capacity, however the same for Vijayanagar plant is difficult owing to iron ore mining cap of 30 MnT imposed in Karnataka.

5. Regarding Blended Coking coal cost – JSW Steel expects blended coking coal cost to stand at USD 220-225/MT, CFR Port in Q4 FY17 against USD 172/MT, CFR Port in Q3 FY17.

6. Indian flat steel prices increased considerably in Q3 FY17 – Domestic flat steel prices moved up by USD 30-35/MT in Q3 FY17. There are further chances of raising prices in Feb’17, however domestic demand and global prices will remain governing factors.

7. Two Karnataka iron ore blocks to become operational in Apr’17- Out of the 5 iron ore mine blocks that JSW Steel won in auctions, the company expects 2 mines to become operational in Apr’17. While other 3 mine blocks are likely to become operational in Dec’17.