JSW Steel reported a growth of 12% in its crude steel production as compared to last month. The company that faced difficulty in procuring Iron ore last year, was able to jack up its Steel production significantly due to better sourcing of raw material. Its Flat Steel production grew by 55% Y-o-Y, whereas it grew by 6% M-o-M. The Flat Steel industry has been struggling with a slackened demand in the domestic market, but a weaker rupee helped manufacturers to rely on global markets.
The total yearly crude steel production for JSW stood at around 12.17 MnT for FY14 as compared to about 8.52 MnT last fiscal. Its Flat Steel production stood at 9.74 MnT in FY14. A trend of Steel production by JSW Steel is as shown below:
Aligning Strategies for Value added Products
Many industry experts believe that manufacturers may witness a tough time ahead battling with the changing domestic environment and a volatile export market. But some manufacturers defy this logic. Slowdown in export will help manufacturers to focus on domestic market. Manufacturers like JSW are looking to strengthen its footprint in the value added Steel segment.
SteelMint talked to an official of JSW. He said, “appreciating rupee will bring down the feasibility of exports. However, we have observed a good demand for our value added Steel products in the domestic market. This is going to drive the demand for Flat Steel. 40% of our total production is value added steel. We are quite optimistic for the growth of this segment, since it has been registering growth of 10-15% Y-o-Y.”
Value added products like Galvanized and color coated Steel have a good potential for upside growth. This is a niche market and its wide application makes it the most alluring product in the market. The spokesperson from the company further added to say:
“A lot of these products have attracted retail consumers as compared to industrial consumers. We have increased our effort to sell our products through retail outlets. Retail Shoppe Formats like JSW Explore has been quite successful. 39% of our total sales in Oct-Dec quarter have been through branded retail outlets.”
Some traders view that it is a specialized product and hence may not influence the overall volume of trading in the market. A trader based in Chennai said “the awareness level among people is very low for color coated Steel products. Manufacturers need to adopt a good pricing policy in order to enthuse buying from retail consumers”.
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