JSW Steel, one of the leading players in Flat Steel segment, has reported an increase in its output for Flat Steel by 61% this November as compared to the corresponding month in 2012. The rise in output has come on the backdrop of a slow demand in the domestic market, which is noteworthy.
Domestic market has not seen an uptick in demand from sectors like automobiles and consumer durables industries which constitute the major consumers of Flat Steel. In fact, the inert sales of automobiles in November show no signs of recovery yet. Some of the primary players in the Flat Steel segment had also decided to hold on to their prices due to a slow demand in the domestic market.
However, this slowdown in domestic demand has not discouraged JSW to step down its production. JSW Steel is riding a wave of optimism due to better prospects arising in the global steel markets. The company is planning to export 3 MnT of Steel this fiscal, which is a 57% rise, as compared to its yearly export of 1.9 MnT. Not only that, JSW is expanding its global footprint by catering to new markets in China, Japan and S. Korea.
Apart from this, a weaker INR has helped the company to increase its realizations further. Rupee has depreciated significantly from INR 55/USD levels in November 2012 to INR 61/USD in November 2013, giving the company a reason to cheer! Better export realization on account of currency depreciation has led to improved sentiments, and it has perhaps been another factor behind a better production during times of bleak domestic outlook.
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