India: JSPL crude steel production up 2% m-o-m in Jul’21

Jindal Steel and Power Limited (JSPL), one of India’s primary steel mills, said the company is on track to achieving its annual target of 8.25 million tonnes (mn t) for FY’22, in its recent BSE filing.

Further, the company produced 0.650 mn t of crude steel in Jul’21, up 2% as compared to 0.639 mn t a month ago, as per the company’s recent BSE disclosure. Similarly, the manufacturer posted an 8% increase in crude production y-o-y against 0.603 mn t in Jul ’21.

Other highlights

1. Steel sales jump 21% m-o-m: Sales volumes stood at 0.670 mn t in Jul ’21 as against 0.552 mn t a month ago, registering a hike of 21% m-o-m and 5% y-o-y respectively. In Jul ’20, JSPL’s sales stood at around 0.637 mn t.

2. Exports in Jul ’21: Meanwhile, exports accounted for more than 40% of the total sales volumes due to high spot demand from international markets.

Reasons behind growth in production and sales

• Robust demand for Indian steel in the overseas market: Removal of export rebate from steel products in May, and a lack of clarity on Chinese exports tax announcement since then, has increased preference for Indian-origin steel products in the overseas market. Also, in July, increased exports were reported to Vietnam, Turkey, and South Korea for Aug-Sept shipments.
• Recovery in the domestic market: There has been an increase in labour hands returning to work with a gradual recovery of the Indian economy amid the expedited vaccination process. This has also pushed the production levels higher during the month.

The company said it looks forward to achieving its FY’22 production guidance.

“Despite the second wave of Covid-related disruptions, we are on track to achieving our annual target of 8.25 mt for FY’22. Further, we are seeing Covid cases come down, which will give a major relief to the industry and our customers. The effective vaccination campaign driven by the Government of India will encourage workers to return to construction sites and help speed up manufacturing, which will likely boost domestic demand,” said V.R. Sharma, Managing Director, JSPL.