JSW Steel increases production of steel products

India's private steel sector, represented by JSW Steel, is ramping up production of long steel products to meet demand for government-funded infrastructure projects. The company's steel sales increased 16% to 3.55 million tonnes in the 2017-18 fiscal year ended March 31 from 3.06 million tonnes in 2016-17.

JSW Steel is expanding steel production capacity at its two Indian plants - Vijayanagar and Dolvi - to 24.7 million tonnes per annum by 2020 from 18 million tonnes per year. Most of the additional capacity will be used to produce sheet steel, which remains the backbone of JSW's business.

JSW Steel has previously tried to boost long-term product sales due to slow demand from the infrastructure sector. But sales rose in 2017-18 on stronger demand from the metro, airport and highway. The fastest growing product category is treated (TMT) rebar, which posted a 17% increase in sales.

The company expects to fully utilize the full 5Mtpa production volume over the next few years, thanks to accelerated infrastructure growth. JSW Steel is also adding 1Mtpa of wire rod capacity at its flagship Vijayanagar plant in southern India.

The company is awaiting bankruptcy court approval for the acquisition of the Monnet Ispat steel plant, which it bought at a heavily indebted court auction. JSW expects to increase the supply of TMT by 500,000 tons /year within 3-4 months after the approval of the deal.

Domestic demand for Indian steel is likely to rise 7-8% this year, driven by growth in infrastructure and the automotive sector.