JSW Steel forecasts to produce 16mn mt crude steel in the fiscal year 2021 (FY2021) in line 16.06mn mt produced in FY2020. the company produced 3.97mn mt crude steel in the March quarter (Q4 FY2020). JSW Steel anticipates demand to be subdued in the near term as downstream consumers like automotive, construction, engineering and capital goods, among others, are yet to re-start operations.
The company plans to capture overseas market orders to improve utilisation and generate cash flow, according to a company statement, released on May 22.
JSW Steel’s total sales volume in Q4 was 3.70mn mt, down by 14pc from the prior year quarter. Output reduced on the back of the COVID-19 lockdowns affecting economic activities across the country. The company had to suspend and curtail operations across units due to supply chain disruptions.
In Q4, the company’s revenue decreased by 23pc to Rs15,277crore ($2.01bn) from the prior year quarter due to lower volumes. It posted a net profit after tax of Rs242crore.
Capex plans stalled amid lockdown
Lockdown in India was maintained to contain the COVID-19 pandemic and this severely impacted projects at various JSW Steel sites. All sites suffered non-availability of manpower and material due to restrictions on movement.
At JSW’s Dolvi works, permission to restart project activities was received towards the end of April and resource mobilisation started thereafter, with a few workers. The company is currently working on mitigation plans to overcome these challenges.
The expansion of crude steel capacity at Dolvi works from 5mn mt per annum to 10mn mt annually was hindered due to Covid-19.
The captive power plant and coke oven Phase 2 could get delayed into the second half of FY2021. Similarly, the 8mn mt annual capacity of the company’s pellet plant and the wire rod mill at Vijayanagar is expected to be commissioned in Q2FY21.
The company’s CRM1 complex capacity expansions at Vijaynagar to 1.80mn mt per annum from an annual 0.85mt will be commissioned between Q2 and Q3 of FY21. The total planned capex spend for FY2021 is revised to Rs90,000mn from the previously slated capex of Rs163.40bn.