Major Indian private steel manufacturer-JSW’s production volumes of crude steel, flat-rolled, and long-rolled products tumbled in FY ’21.SteelMint learned from the company’s recent press release.
Major highlights are mentioned below:
1.Crude steel output down by 6% in FY ’21- The manufacturer’s crude steel production for FY ’21 was at 15.08 mn t, down by 6% as compared to 16.06 mn t a year ago. Also, on a quarterly basis, it increased by 3% in Q4 FY ’21 to 4.19 against 4.08 mn t in Q3. The capacity utilization during Q4 has improved significantly to 93% as against 66% in Q1.
2. Flat-rolled steel production down by 4% in FY ’21-The output of flat-rolled products reported a de-growth by 4% to 10.87 mn t in FY ’21 compared to 11.35 mn t in FY ’20. However, the quarterly results remained largely unchanged at 2.99 mn t compared to 2.98 since the last two quarters.
The decline in trade prices of flat steel on stagnant demand and limited buying inquiries in the trade market had resulted in a reduction in domestic prices in Mar ’21. Mill announced a correction in flat steel prices by INR 1000/t in Mar ’21 on the back of dull domestic demand.
3.Long-rolled steel production fell by 14% in FY ’21-JSW produced 3.21 mn t of long steel in Mar ’21, falling by 14% over 3.72 mn t a year ago. On the other hand, the same has increased by about 13% on a quarterly basis in comparison with 0.93 mn t in Q3 FY ’21.
Factors that have impacted the production in FY ’21-
a) Capacity utilization- The spread of COVID-19 in India in Q1 FY ’21 and the stringent lockdown placed to counter its effect from Apr-Jul ’20 resulted in reduced capacity utilization at 66% during Q1. However, the capacity utilization gradually improved to 93% in Q4.
b) Domestic trades hampered by hindered logistics-The trades and allied activities like transportation and logistics still remained disrupted due to on-and-off lockdowns until Sep ’21. Along with this, there were very limited resumptions in activities in the construction and infrastructure projects until Q3 FY ’21, weighing on the finished steel demand.
Outlook- The company’s crude steel output and prices are expected to remain strong in Apr ’21 due to improved domestic demand and increased allocations for exports in the global market. Also, government investments in key steel-consuming sectors like railways, construction and infrastructure sectors announced in H2 FY ’21 shall improve the company’s steel production in upcoming months.
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