The country’s largest private sector integrated steel producer by volume, Sajjan Jindal-led JSW Steel on Wednesday posted its first consolidated quarterly loss in seven quarters, on the back of sharp fall in steel prices and a flood of cheap imports of the alloy into the country.
The company reported a consolidated net loss of Rs 106. 81 crore in the April-June quarter against a net profit of Rs 656.49 crore in the same period last year. “The Indian steel industry continues to suffer from a surge in imports at a price which is significantly lower than domestic prices in exporting countries – especially from China, Korea and Japan; consumption of domestically produced steel was down by 0.4% y-o-y as total steel imports were up by 57% y-o-y. The elevated level of steel imports has resulted in excess availability of steel and an inventory build-up across the system is causing injury to the domestic steel industry,” the company said.
Though the government has recently raised import duty on steel products by 2.5%, mainly to protect the domestic industry, JSW Steel expects more from it. “Several countries have initiated tariff/non-tariff barriers to arrest dumping of steel in their markets. It is expected the government of India shall act expeditiously to stop further damage from dumping to the domestic industry,” it said.
Net sales value were down to Rs 11,382 crore during the reporting quarter from Rs 13,067 crore a year ago, reflecting the current trend of subdued price and lower realisation even as sales volume went up by 8% to 3.11 mt. Total expenses were less at Rs 10,887 crore in the reporting quarter from Rs 11,438 crore a year earlier. Tax outgo also came down to Rs 16.61 crore from Rs 382.75 crore in April-June of last fiscal.
Exports took a beating while domestic sales volume grew by 27% to 2.66 mt. Sales of flat products grew by a meagre 4%, but long products, used in the construction sector, rose by 32%.
“In India, overall activity levels show a modest pick-up. Industrial production growth continues, albeit at a slow pace. Public spending on the infrastructure segments seems to be picking up; however, the momentum needs to be sustained in the coming quarters for an actual uptick in investment cycle,” it said.
JSW Energy arm sells 26% stake in South African firm
JSW Energy on Wednesday said its subsidiary has sold 26% stake in South African Coal Mining Holdings to meet regulatory norms. “JSW Energy Natural Resources South Africa, a step down subsidiary of the company in South Africa has disposed of 26% stake in its subsidiary, South African Coal Mining Holdings,” JSW Energy informed the BSE.