JSW Steel produced 1.338mn mt of crude steel in October, up by 7pc from the prior October and up by 4pc from September. The company’s plants operated at an average capacity utilisation rate of 89pc in October.
In H1, JSW Steel produced 6.81mn mt of crude steel. Production was down by 16pc from the prior H1 due mainly to the impact of the COVID-19 pandemic. The company’s Q2 crude production of 3.85mn mt was similar to the prior year as economic activities restarted after the easing of pandemic restrictions and steel demand started recovering gradually. In Q2, JSW’s capacity utilization rose to 86pc from 66pc in Q1.
The company is confident of achieving its revised production guidance of 15mn mt of saleable steel and 16mn mt of crude steel in FY2021.
Steel price hikes
In early November, JSW Steel along with other primary steelmakers raised long steel prices by Rs1,000-2,000mt for November deliveries depending on product types. Rebar prices were hiked Rs1,750/mt. While HRC prices were hiked by Rs1,250/mt.
In the international market, iron ore price surged to around $117-118/mt cfr China in November up by around $40/mt from April, but down from $124/mt in early October. In addition, a shortage of iron ore in the domestic market also forced steelmakers to raise price. Of the 19 mines leased out in the state of Odisha in February, only 5 mines are operational and even these five has trouble ramping up production due to limited means.
To reduce its dependence on merchant miners, JSW is planning to ramp up ore production from its captive mines. The company aims to meet 51pc of its iron ore requirement from captive mines by the end of FY2021. The company had acquired four iron ore mines in Odisha during the February auction. At 100pc capacity, these mines can produce 36mn mt and meet 70pc of JSW Steel’s ore requirement.