Sales Highlights
The company has achieved sales volume of 3.3 MnT in Q1 FY17 (Apr-Jun’16), up by 6.45% against the corresponding quarter of previous year. However, the same has remained almost flat against previous quarter i.e. Q4 FY16 (Jan-Mar’16).
The MIP impact can be seen in the form of improvement in company’s net sales realizations which has recorded a growth of 72% in Q1 FY17 (Apr-Jun’16) against previous quarter of Q4 FY16 (Jan-Mar’16).
The company has set sales target of 15 MnT for FY 2016-17, which it plans to achieve by adopting better product mix and focusing on export market outside Asia.
Crude Steel Production
The company’s has emerged as a market leader in terms of crude steel production and has reported 14% increase in Q1 FY17 against corresponding quarter of previous year. The same is recorded at 3.87 MnT in Q1 FY17.
However, if Q-o-Q comparison is done, in Q4 FY16 (Jan-Mar’16), the company’s crude steel production stood at 3.20 MnT.
Products Mix
The company’s flat products output recorded an increase of 9% in Q1 FY17 at 2.74 MnT against 2.50 MnT in Q1 FY16.
In case of long products, company registered an increase of 23% at 0.85 MnT in Q1 FY17 against 0.69 MnT in Q1 FY16.
The company’s export stands at 19% of the total volume during Q1 FY17. It plans to increase the sales of both branded and retail products along with its galvanized products in coming quarters.
MIP or Anti-Dumping Duty
As per JSW Steel officials, although MIP has been implemented in the month of Feb’16, country’s steel imports have come down moderately by 26.7%. Also out of the total steel imports, about 50% imports is below the MIP price. Thus, it is being believed that either imports have been made under Advance license scheme or there has been circumvention of MIP. As a result, it is important on the part of government to closely monitor the steel imports into the country under MIP.
However, the company believes that as MIP has a broader coverage over steel products with respect to anti-dumping duty which is country and company specific, MIP should be extended for another six months.
Prices and Demand outlook
As per the JSW officials, due to seasonal demand slowdown during Jun-Sept, steel prices are likely to be under pressure in second quarter of FY17. As there is more slack in construction activities during monsoons, the prices of long products are likely to be more under pressure as compared to flat products in second quarter of FY17.
However, the demand outlook for automotive components, consumer durable and solar sector is quite positive which will support flat products prices in the coming quarters.
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