Steel prices may remain stable for a quarter: VR Sharma, Managing Director, JSPL : Rashtra News
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JSPL managing director VR Sharma tells Surya Sarathi Ray that domestic steel prices will remain stable at least till the next quarter.
Export and import of finished steel in November 2021 declined by 31.6% and 17.5%, respectively, over October 2021. At 8.47 mt, consumption in November also fell by 8% over the same month last year and 1.5% over October 2021. A price decline followed. In an interview, JSPL managing director VR Sharma tells Surya Sarathi Ray that domestic steel prices will remain stable at least till the next quarter. Edited excerpts:
Why are prices coming down?
Prices are coming down as cost of inputs like coking coal, iron ore and scrap have fallen. We have passed it on to the consumers.
How much has been the price reduction in December?
There has been no price reduction in December. The total decline in the prices in the last three months is about Rs 2,500 per tonne. Now, prices are stable. The HRC price is now Rs 66,500 in the Mumbai market and Rs 66,000 in Delhi.
What is the outlook?
The price is stable now. In recent times, iron ore price has moved up. Earlier, it fell to $110/tonne in the international market, now it has again gone up to $130/tonne. Similarly, scrap prices have firmed up by $20-25 a tonne. Coking coal price came down for a while for 2-3 weeks, but again has gone up by $20 a tonne to $340-350/tonne. So, these developments will hold the price at the moment. There will be no reduction further. It will sustain.
How long will it sustain?
It will sustain at least for the next quarter. There will be no increase in the prices either.
But input prices are moving up.
We are following a pattern. So, even if the iron ore prices go up, we are not going to increase the price immediately. We will wait for 15-20 days to see the impact. Similarly, if there is a decline in the input cost, we will see the impact on cost of production before taking any call.
Exports are declining, so is domestic consumption…
Prices can’t perpetually go up and up for any item. There has to be some pause. And it has already taken place. There is some ambiguity in the international market as well. During Christmas time, this thing happens every year as customers go on holiday and then they come back after the first week of January. So, these 15 days is always a less business time. Most of the steel mills are already booked and as the world opens, the business will restart.
Are we losing in the export market because of China again?
No, China is a net importer now. They are not posing any threat. In order to achieve their carbon emission rate, they are importing semi-finished products, so that they don’t have to melt iron ore to make steel. Maximum emission takes place in the blast furnace. They are trying to reduce their blast furnace production and to compensate, they are importing semi-finished products.
What about the domestic demand?
The domestic demand was down due to two reasons — there was a construction ban in the NCR and then there was heavy rain and flood-like situation in the South, especially in Tamil Nadu and Karnataka. The rain disrupted construction and manufacturing activity. But, as the rains have gone, the construction in NCR has started. However, it will take at least 10-15 days for the labour to come back.
How serious is the Omicron threat?
We don’t see Omicron as a threat as most of the people are already vaccinated. Business will be as usual. The situation now is different from April-May. In April-May, we were not ready and people were not vaccinated. Now, more than 60 crore people are vaccinated with both the doses.
What is your Budget wish list?
The finance minister has already said that the government will be working to improve upon infrastructure. So, when the infrastructure growth is to be given an impetus, it will augur well for the steel industry. We are not expecting any duty change or fiscal incentive from the Budget.
Will JSPL opt for the PLI scheme?
The government has already taken a declaration from all of us as to what new products we are going to produce. Under the scheme, JSPL intends to produce speciality rails, coated products, high-strength steel, high-strength alloy steel, forging grade of steel and rounds, speciality auto-grade rounds.
What is the total capacity that JSPL is looking at by 2030?
Our wish is to reach to 50 million tonne per annum (mtpa) by 2030. By 2026, we want to be somewhere around 23-24 mtpa. We have nine mtpa capacity now. We are adding 6 mtpa capacity by end of 2023 both in Angul and in Raigarh with an investment of Rs 18,000 crore.
While all expansions will mainly be brownfield, one greenfield, 6-mtpa plant may come up in Krishnapattanam. We have got the 800 acres of land from the Andhra Pradesh government. After the expansion of the Angul plant, we will look into it. The investment in the proposed plant will depend upon its configuration.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.financialexpress.com feed.)
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