Jindal Steel and Power Limited (JSPL) plans to export 33pc or 600,000mt of its output in Q2 FY2021, according to the company’s earnings call. It is also planning to produce 1.8mn mt steel on a standalone basis in this period.
In the first quarter of FY2020-21 (Apr-Jun), the company exported a little over 50pc or 0.9mn mt of its production to offset a slump in domestic demand. Its production was around 1.67mn mt in Q1.
During the lockdown in April, company exported 250,000mt steel, while in May and June, 401,000mt and 262,000mt was exported, respectively.
Products like rail blooms and plates were exported to France, Spain, Italy, Denmark, Germany, Saudi Arabia, Qatar, Bahrain and UAE while wire rod was exported to Southeast Asian countries like Indonesia.
Meanwhile, JSPL supplied rail bloom to France Rail as Ascoval steel plant was shut down, and made long term contract to supply 250,000mt of rail blooms per year. It managed to supply 17,000mt in April and 13,000mt in May. Going forward, around 13,000 to 14,000mt is expected to be delivered to France every month.
Post COVID-19, the Chinese government announced projects worth $1.7 trillion for the growth of infrastructure which brought good opportunity for Indian steel producers. China is geographically closer to India and consequently low freight. This is why China preferred to buy steel, mostly billets, from India than from countries like Turkey, Ukraine, or Russia during this period.
The Indian steelmaker is now focusing on sales in the domestic market as demand from the infrastructure sector such as government water pipe-line projects, industrial segment like high rise buildings has picked up.
In India, secondary market has also seen an upward movement of price this week. The daily Davis Index for billet and rebar in Mumbai went up by Rs1,200/mt ($16/mt) since the starting of the week and settled at Rs29,100/mt ($389.03/mt) and Rs31,500/mt ($420.95/mt) ex-works, respectively.
JSPL is expected to produce 8.5mt of crude steel in the financial year 2020-21. In India, it has manufacturing facilities at Raigarh (Chattisgarh), Angul (Odisha) and Patratu (Jharkhand).
($1= Rs74.83)