PremiumJSW Steel joint MD and group CFO Seshagiri Rao said the company expects 7-8% of higher steel demand in the second quarter of FY 22-23 with a revival of re-stocking activity from July and hence the profitability can also improve over the first quarter
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JSW Steel joint managing director and group chief financial officer Seshagiri Rao said the company wants export duty on the metal to be scrapped soon and foresees steel prices to remain "firm" with a revival in demand by 7-8% in the second quarter of FY 22-23.
Rao said the steel industry witnessed a fall of by 4.5% in the local market in the first quarter of FY 22-23, news agency PTI reported.
Contrary to the earlier announcement of a reduction in the capex by ₹5,000 crore to ₹15,000 crore in the current fiscal, the Mumbai-based steel major said that there won't be any no ‘cut’ in its capex plans for the purpose of growth. Only discretionary and non-essential special projects have been calibrated till the market situation normalizes, the JSW Steel added.
Rao said the company expects 7-8% of higher steel demand in the second quarter of FY 22-23 with a revival of re-stocking activity from July and hence the profitability can also improve over the first quarter. The maximum benefit of raw material price moderation can only be expected in the Sept-Dec period, Rao added.
Rao said due to a 2.5-time rise in raw material cost, and a decline in steel prices and export duty, the company's profit slumped 85% to ₹839 crore in the first quarter of FY 22-23.
Steel prices had corrected by 20% in both local and international markets. Steel production in the global market moderated by 12 million tonne in June, including that of China.
Roa said the annual sales projection of JSW for FY'23 remains intact at 24 million tonne, which is 16% higher than FY'22 as demand will catch up in the subsequent quarters. The company is also expecting that the government will scrap steel exports duty soon to boost overseas shipment, Roa added.
Elaborating JSW Utkal Steel, a greenfield project in Odisha, Rao said that investments worth ₹4,500 crore in mine, slurry pipeline and beneficiation plant works are under progress. The integrated steel plant will come up subsequently. The Vijayanagar 5-million tonne brownfield project will be completed by FY'24, Roa added.
The Mumbai-based Indian MNC plans to raise its production capacity to 37 million tonne by 2025 from 27 million tonne now.
Indian steel exports declined by 26% in the April-June quarter, while that of China grew by 54% to 20 million tonne.