Jindal Steel & Power Ltd is hopeful to get a positive judgement regarding its case for buying high grade iron ore stocks lying at Sarda Mines for which it has already paid the royalty. Company’s 30% iron ore demand is met from its captive Tensa mines and for rest 70% its dependent on merchant market. The SC has completed the hearing on the matter and has reserved the final judgement, which is expected anytime soon.
Also they have a conveyor belt attached to its Barbil plant which will result in increased pellet production and also lower logistics cost by around INR 300/MT.
SteelMint in short interview with Mr VR Sharma Managing Director JSPL shared “We have a very good product basket- structures, plates, rails, channels, products for shipbuilding industry etc. We export plates, billet & granulated pig iron. Related to exports, we decide considering INR fluctuations and market conditions. We have been maintaining consistent export quantity at least 60,000 MT for billets per month and around 30,000 MT granulated pig iron per month in last few quarters. The numbers might get changed slightly depending on export market scenario. We have come up with the new DRI plant and dispatch of 100,000 MT additional steel per month”.
JSPL conducted a conference call today for its quarterly results. The key highlights are mentioned below
1.Company’s steel and related products production inch up – Production of steel and related products moved up slightly by 2% Q-o-Q basis in Q3 FY’20 to 1.61 MnT which was 1.58 MnT in Q2 FY’20. Also, on a yearly premise, the same jumped by 22% in Q3 FY’20 as compared to 1.32 MnT in Q3 FY’19.
2.Company’s steel and related products sales move up – Company’s sale of steel and related products ascend by 14% Q-o-Q in Q3 FY’20 to 1.67 MnT against 1.46 MnT in Q2 FY’20 owing to decent export bookings. Also, on a yearly premise, the same climbed to 31% in Q3 FY’20 as against 1.27 MnT in Q3 FY’19.
3.Company’s crude steel production and sales in Q3FY20- Company’s crude steel output stood at 1.53 MnT up by 25% on yearly basis against 1.22 MnT in Q3FY20. Meanwhile crude steel sales stood at 1.61 MnT in Q3 FY20 up by 34% on yearly basis against 1.20 MnT in Q3FY19.
4.Company’s EBIDTA witnessed a growth of 8%- Company’s EBIDTA witnessed a growth of 8% to INR 1,352 Cr. in Q3 FY’20 in comparison to INR 1,255 Cr in previous quarter. However, on a yearly premise, the same declined by 9% in Q3 FY’20 as against INR 1,480 Cr. in Q3 FY’19.
5. Production and sales of pellets- During 3QFY20, production of pellets stood at 1.79 MnT. However, the company achieved a rise of 13% Y-o-Y basis in external sales of pellets and sold 0.65 MT during 3QFY20.
6. Lower power demand in Q3FY20 – JPL generated 1,900 million units in Q3FY20 quarter as compared to 2,271 million units in 2QFY20 owing to slowdown in the economic activities along with the extended monsoon during the quarter.
7.Commercial coal mining in India– Indian govt passed an ordinance on 8th Jan’20 to ease restrictions and to enable wider participation by completely opening up the coal sector for commercial mining for all local and global firms. Ministry of Coal (MoC) has released an initial list of 84 coal blocks with a total reserve of 22,360 MnT. Also, the ministry has announced 100% FDI in commercial coal mining under the automatic route. Also, no restriction on end use and sale of coal. Further, out of the 204 blocks freed up for auction in 2015, the ministry noted that only 29 coal blocks had been auctioned so far.
8.Target for FY20 – Company is eyeing to achieve its steel production guidance 6.5 MnT from India.
9.Net sales realization fell in Q3FY20- In Q3FY20, net sales realization fell by INR 3500/MT owing to sluggish demand and slow trading activities in domestic market. However, steel prices have started to recover from the month Nov’19’ and have increased by around INR 2,000/MT.
10.Demand of rebar is better that flat steel products- Since last few days demand of TMT rebar is comparatively higher than flat steel products like HRC and plates. Also demand from shipbuilding, oil tankers, Indian railways and metro rails is increasing.
11.Increase in raw material prices- Coking coal prices stood at USD 135/MT, FoB Ahit the lowest and started to move up and are currently at USD 150/MT.Similarly iron ore prices have moved up.Thus increased in raw material prices will be passed on to consumers.
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