Jindal Saw’s iron ore and pellet production increased to 361,300mt in Q1 FY2022 (Apr-June), up by 68pc from the prior-year quarter, while sales rose by 78pc to approximately 366,200mt, according to the company’s operations update. The company’s order book is at around 132,000mt. Amid higher iron ore and metals prices and strong demand for steel from construction and infra sectors, the company is banking on its pellet segment to boost overall margins.
Pig iron production in Q1 rose significantly to 12,400mt, compared to a dismal 600mt output a year ago, while sales increased to 12,600mt.
Saw pipe production in Q1 rose by 13pc to around 101,000mt from 89,000mt in Q1 FY2021. The company has streamlined its production to fluctuating raw material supply and prices amid a build-up in demand. Stability in international crude oil prices support LSAW pipes outlook globally, while in India, planned infrastructure projects are expected to support demand from oil and gas, and water segments.
In the DI Pipe business segment, production increased to 114,000mt in Q1, higher by 58pc from a year ago. Production has improved amid build-up in the order book, but higher raw material prices could impact profitability in the coming quarters. The company is focused on catering to government-funded water resource management projects.
Seamless pipes production increased to around 49,400mt, up by 73pc from Q1 FY2021 amid firm demand from the oil and gas industry.
Outlook
The iron and steel pipe industry stands to benefit from the infrastructure development in India, especially in water management, oil and gas exploration, expansion of gas pipelines, transportation and construction sectors. Overall steel consumption and demand for steel tubes and pipes are expected to improve in FY2022 amid robust economic activities.