JSPL's crude steel production up 38% in Q1 FY'16

Jindal Steel and Power Ltd (JSPL) today said it steel production grew by a healthy 38 per cent to 1.10 million tonnes in April-June quarter of this fiscal helped by capacity upgrade and better utilisation.
The city-based firm had produced around 800,000 tonnes of crude steel and direct reduced iron (sponge iron) during the same quarter of 2014-15, it said in a BSE filing.
Commenting on the performance, JSPL's Group CEO and Managing Director Ravi Uppal said: "This performance speaks about the company's competence to perform in any situation. We achieved this on the back of capacity upgrade at our plants as well as better utilisation of our existing resources."

The conglomerate's production facilities at Angul (Odisha), Raigarh (Chhattisgarh) and Sohar (Oman) performed at optimum levels, which led to higher production of crude steel and sponge iron.
During the January-March quarter, JSPL's crude steel production rose by 45 per cent to 1.1 MT compared to the same quarter of 2013-14. Production of sponge iron rose by 18 per cent to 0.87 MT during the same period.
For entire 2014-15, crude steel production grew by 25 per cent to 3.62 MT compared to 2013-14. Sponge iron was up 10 per cent to 3.08 MT during the same period.

On the demand front, Uppal exuded confidence on the market's revival after the monsoon season.

"We expect post-monsoon the infrastructure market to pick up, which in turn will help in reviving the demand for steel," he added.
However, the Naveen Jindal-led company's stock fell by five per cent to close at Rs 84.60 per share on BSE.
Market analysts attributed the decline to higher output, subdued demand and weak realisation, which is expected to impact the earnings of steel producers.
"Market is looking at the steel situation with concern. China is flooding the market with cheap steel as its own demand is very poor. Adding to this is the production from domestic firms, which is also coming into the market. All this is leading to softening of prices," an analyst said.

According to a steel industry executive, China and Russia are exporting cheap steel to India at a lower price than their domestic selling price which is impacting domestic producers.
On steel, JSPL had said that the last quarter of 2014-15 saw several adverse factors come together and negatively impact the company's financial performance.
However, the firm expects Indian economy and steel demand to gather momentum from the third quarter of 2015-16.
JSPL also expects to raise its steel production by 50 per cent to 5 MT in 2015-16, if conditions are favourable.