Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian private steel producer Jindal Steel and Power (JSPL) reported steel sales of 1.61mn mt in Q1 FY2022 (April-June), up by 3pc from a year ago. Exports accounted for 34pc of sales higher from 27pc in Q4. Share of exports could have been higher, if not for port congestions due to bad weather


In Q1, crude steel production (including pig iron) rose to 2.01mn mt, up by 20.4pc from a year ago quarter, which was impacted by national lockdown resulting in production cuts. 


Iron ore pellet output was higher by 15.5pc to 2.16mn mt during the period. As a result of higher production, sales of pellets rose to 400,000mt in Q1 from 290,000mt in the prior quarter.


Finished steel sales were at 1.61mn mt, up by 3.2pc in Q1. Out of total sales exports of steel were almost 34pc in Q1 compared to 27pc in the prior quarter Q4 FY2021 (Jan-March).


Lucrative exports supported the company’s sales in Q1 while the impact of Cyclone Yaas and COVID-19 on port activities slowed steel exports. But the company aims for higher exports in the coming quarter as Chinese and Russian producers are set to stay away from the export markets after changes in their steel export policies. 


JSPL’s consolidated net profit surged 11-folds to reach Rs25,160mn ($33.87mn) for the same period on higher sales volume and an increase in steel prices. JSPL’s revenue from operations rose 67pc to Rs116,980mn ($1575mn), while EBITDA rose by one-and-a-half folds to Rs45,390mn ($611mn). 


Also, input costs increase on depletion of low-cost iron ore inventory amid high international prices and tight supply. Compared to Q4, steel production and sales volume were lowered due to the diversion of in-house liquid oxygen used for steel production for medical use.



The company is positive about demand recovery in the coming quarters amid increasing economic activities. Construction activities in Q1 were affected by the monsoon, the second wave of COVID-19 and a shortage of workforce. 


Iron ore availability remains tight on lower production during monsoon meanwhile inventories from Sarda mines are vanishing. Sourcing ore from other local miners is not a concern.


The steelmaker has ambitious plans to raise capacity at its Orissa Angul plant by 6mn mt with an investment worth Rs180bn ($2.4bn). Until 2023-24, the company’s product portfolio could include value-added products like specialty HRC, specialty plates also cold-rolled, galvanised, colour-coated, galvalume and pipes.




Leave a Reply

Your email address will not be published.