JSW steel production in August decreased by 13%

One of the largest private steel producers in India, JSW Steel, recorded a 13 percent drop in crude steel production in August 2019.

In a statement to the stock exchanges, JSW Steel said crude steel production for August 2019 was 1.25 million tonnes, up from 1.45 million tonnes in the same period last year.

Production of flat products, including plate, fell 13% to 851,000 tonnes, while production of long products fell 5% to 291,000 tonnes.

JSW Steel says production has been lower due to the planned shutdown at the Vijainagar plants and the severe monsoon impact at the Dolvey plants.

While JSW's Vijainagar manufacturing plant is India's largest steel plant with a capacity of 12 million tonnes, Dolvi's plant is in its final phase of expansion from 5 million to 10 million tonnes. The expansion is scheduled to be completed by March-April 2020.

In July, JSW Steel increased crude steel production by 1.32 million tonnes, down four percent year on year.

Flat products declined 8% over the same period to 908,000 tonnes, while 316,000 tonnes of long products were up three percent. While the drop in steel production at JSW was due to a planned shutdown, the steel industry faced high inventory levels due to slower growth in user industries.

The rating agencies forecast the sector's outlook for the remainder of FY20 is expected to be weak.

The Indian Ratings and Analytics Study (Ind-Ra) revised its steel sector outlook from stable to negative from stable for the remainder of FY20 amid sluggish expectations for steel demand growth due to a combination of structural and cyclical problems in the end-user sectors. , primarily auto and real estate, construction.

Ind-Ra revised its expectations for steel demand growth in fiscal 2020 to about 4 percent from a previous forecast of 7 percent. The figure for fiscal 2019 was 8 percent.

The latest ICRA report on the steel sector also says that the downward trend in margins will continue as domestic steel consumption is constrained and the outlook for global growth is weak amid growing trade war tensions.