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JSW Steel’s Crude Steel Production Falls To Two-Year Low In August

JSW Steel has shut its plant in Vijayanagar, Karnataka, while the monsoon impacted operations at its unit in Dolvi, Maharashtra.

Traffic passes beneath the signage on the exterior of JSW Steel’s manufacturing facility in Dolvi, Maharashtra. (Photographer: Dhiraj Singh/Bloomberg)
Traffic passes beneath the signage on the exterior of JSW Steel’s manufacturing facility in Dolvi, Maharashtra. (Photographer: Dhiraj Singh/Bloomberg)

JSW Steel Ltd.’s crude steel production fell to the lowest in at least two years in August as the company shut its plant in Vijayanagar, Karnataka, while a severe monsoon impacted operations at its unit in Dolvi, Maharashtra.

Crude steel production of the company dropped 13 percent year-on-year to 1.25 million tonnes in August, according to an exchange filing. That’s the lowest since at least April 2017.

Most of the decline was led by a fall in output of flat steel products, down 13 percent over the last year to 851,000 tonnes. Production of long products dropped 5 percent year-on-year to 291,000 tonnes.

JSW Steel’s facility at Vijayanagar is the single-largest location steel-producing unit in India with a capacity of 12 million tonnes per annum, according to the filing. The firm had earlier said it aims to complete the capacity expansion of its unit in Dolvi to 10 million tonnes from 5 million tonnes by March 2020.

So far this year, JSW Steel’s production of the crude alloy has fallen 1.95 percent over the corresponding period to 6.8 million tonnes.

After the first quarter, JSW Steel had said fewer public investment due to general elections and weaker sentiment on account of slowing consumption of staples to automobiles led to a slowdown in the steel industry. It, however, expected the momentum to pick up from the second half of 2019-20.

Analysts View

JSW Steel’s stock is expected to gain 13 percent in the next one year, according to a consensus of estimates compiled by Bloomberg. Yet, the number of analysts recommending ‘Buy’ on the stock came down to 13 from 23 a year ago.

A total of 33 analysts cover the counter.

On Wednesday, JSW Steel shares rose 3.66 percent to Rs 227.70 apiece on the BSE while the benchmark Sensex gained 0.34 percent to end the day at 37,270.82 points.