JSW Steel Ltd, India?s third largest steel manufacturer, on Friday said the company has reported a growth of 33% in crude steel production for May 2009 as compared with the year-ago period. Similarly, other steel players are also expected to report growth in their production on YoY basis. However, on quarter-on-quarter (QoQ) basis, the growth is expected to remain flat, say experts.

JSW Steel?s crude steel production rose to 4.59 lakh tonne in May this year as against 3.46 lakh tonne in the same period last year.

?The substantial growth in production is mainly attributable to the production from the 2.8-mtpa expansion project at

Vijayanagar works,? the company said in a statement.

It is observed that the 2.8 million tonne expansion at Vijayanagar, along with increase in domestic demand, seems to be benefiting JSW Steel Ltd with growth in the company?s production. The commissioning of its 3 million tonne per annum (mtpa) blast furnace in February this year has made it the country?s third largest steel manufacturer.

However, according to a Mumbai-based analyst, ?JSW Steel is lagging behind its guidance. Increase in its crude steel production is due to its expansion at Vijayanagar. Steel players like SAIL and TATA Steel, among others, are also expected to report growth in their production on YoY basis,? he said requesting anonymity.

Experts believe increase in domestic demand, along with infrastructure boost by the government, has benefited the sector.

JSW Steel?s shares on Friday slipped 0.37% to close at Rs 584.75 on the Bombay Stock Exchange.

JSW?s rolled products, i.e., production of flat products, increased 20% to 3.07 lakh tonne as against 2.55 lakh tonne in May 2008. And production of the long products jumped 106% to 0.65 lakh tonne in May 2009 as against 0.32 lakh tonne in May 2008.

JSW is currently working on increasing its capacity to 10 mtpa from 6.8 mtpa by 2011. It has recently said that it plans to raise up to $1 billion to fund its expansion plans and reduce its debt.

With correction of about 60% in the global steel prices due to global economic slowdown, Indian steel players have cut down on their exports and are now completely focusing on growing the domestic sales. Globally, steel demand is expected to dip 15%. However, steel demand in India is expected to grow, with World Steel Association predicting that only India will be in the positive growth zone in 2009, at 2%.