Jindal Steel and Power (JSPL) looks to explore seaborne opportunities with demand in domestic markets coming to a standstill.
A source in JSPL states usually the company sells 30pc of its steel production in export markets and the rest in India. In March and April, the situation, however, seems to have reversed. In seaborne trades, exporters can take advantage of the depreciation in Indian currency. The Indian rupee stood at Rs76.15 against US$1 on April 13 from Rs73.9 a month back.
With Europe grappling to control the rising cases of COVID-19, production of steel remains impacted in most countries in the continent. Indian steelmakers, on the other hand, are getting inquiries from countries like Saudi Arabia, Abu-Dhabi, and Bahrain and China. JSPL mainly sells steel plates, billets, slabs and pellets in export markets. As per Davis Index sources, few primary steelmakers were heard to have sold billets for May shipments at $355-356/mt FOB India or $375-376/mt cfr China in the earlier week.
Despite the lockdown restrictions in India, the country’s steel ministry had requested primary mills like Sail, RINL, JSW, AM/NS to continue production. These companies use blast furnace for production, which if shut, takes at least a month to restart. Amid the lockdown, steel production continued at 50pc of the usual capacity in India.
JSPL, however, could refrain from any production cuts. The company also mentioned that steel supply in domestic markets would restart once the lockdown ends. The company is expected to produce 10mn mt of crude steel in the financial year 2020-21 from the 8.17mn mt in the previous year. It has manufacturing facilities at Raigarh (Chhattisgarh) and Angul (Odisha) in India and Oman outside India.