Indian steelmaker Jindal Saw’s pellet production decreased by 8pc to approximately 337,000mt in Q2 from the prior year as the company gradually ramped up production following the COVID-19-related lockdown. Currently, the company’s pellet units are operating at 100pc capacity. The company’s Saw pipe production fell by 29pc to 1,19,000mt from the prior year in line with planned production cuts amid supply chain disruptions due to nationwide lockdown. DI pipe production fell to match slow demand amid monsoon and continued lockdown in various part of the country.
Outlook
* Demand for steel pipes is expected to remain steady in India amid several oil and gas and water distribution projects scheduled to be implemented soon.
* Plans to expand the network of natural gas pipeline to 27,000 km from 16,200 km will support demand
* Government emphasis on providing clean water further boost demand for pipes.
* Import substitution initiatives like “Make in India” will allow Jindal Saw to expand its share in the domestic market.
- * Healthy orderbook with 9 to 15 months visibility for pipes and pellets and 25pc share of exports in the current orderbook bodes well for the next quarters.
| Jindal Saw’s Q2 production and sales | |||
|---|---|---|---|
| Unit: mt | Q2 FY2021 | Q2 FY2020 | Change YoY |
| Production (approx) | |||
| Pellets | 3,37,000 | 3,65,000 | -8% |
| Saw pipes | 1,19,000 | 1,67,000 | -29% |
| Seamless pipes | 31,000 | 37,000 | -16% |
| Ductile Iron Pipes | 1,13,000 | 1,26,000 | -10% |
| Sales | |||
| Pellets | 3,72,000 | 3,38,000 | 10% |
| Pig iron | 5,300 | 800 | 563% |
| Large Dia. Saw Pipes | 1,14,000 | 1,40,000 | -19% |
| Ductile Iron Pipes | 95,500 | 1,13,000 | -15% |
| Seamless & Stainless Tubes | 34,000 | 34,000 | 0% |
Jindal Saw’s standalone total income in Q2 fell by 15.7pc to Rs20,208mn from the prior year quarter. The company reported a net profit of Rs744mn in Q2. For H1, net profit declined by 24pc to Rs4,490mn from the prior H1 reflecting the impact of the pandemic on the company’s steel business.