Rising Steel Imports From China A Concern, Says JSW Steel CEO

While JSW Steel Ltd. has reported 11% growth in consolidated year-on-year sales, rising steel imports—especially from China—continue to be a key concern for the company.

"Imports is a concern and I think we are watching imports quite closely. In the last year, imports have gone up 37% to 9.6 million tonnes; and if you look at the mix, China is the largest contributor to the imports into India, at about 2.7 million tonnes, which went up by almost 93%," Jayant Acharya, chief executive officer of JSW Steel, told NDTV Profit.

The imports from Japan and Korea have also increased, he said. According to him, the rise in imports is mainly because "India is one of the best for steel from an economic growth perspective and therefore, for the steel demand perspective".

However, Acharya expects the gap between the import price and the domestic price to flatten. And soon, the price of the domestically produced steel will be in line with the imported ones, he said.

The margin, according to him, were impacted due to the higher cost of raw materials. Though the cost did come down in April and May, if the prices continue to be in the same range or reduce further, it will likely help improve the margin in the second quarter, he said.

The company plans to expand production to 38 million tonne and is hoping that this expansion will help improve the cash flow. JSW Steel, which spent approximately Rs 17,000 crore in the previous fiscal, aims to spend Rs 20,000 crore this fiscal, and that includes the capex for expansion.

In terms of the reduction in net debt, Acharya said that the company will be focusing on key ratios. The net debt-to-Ebitda ratio has improved to 2.62 whereas the net debt-to-equity ratio is at 0.93. "We will make sure that the ratios are protected."