Mumbai: JSW Steel will be able to achieve its annual guidance of 9 million tonnes sales in the financial year ending March 2012, despite sluggish demand and margin pressures in the current quarter, officials said on Tuesday.
The O.P. Jindal group firm has reported a 58% higher consolidated net during the quarter ended 30 June on the back of robust sales and good production, joint managing director Seshagiri Rao told reporters.
“With the higher sales volume and higher steel production, all the numbers have come out quite well in the quarter.”
He believes the steel prices have bottomed out and the prices will rise later in the year if marginal steel producers go for a cut in production due to lower prices.
On Tuesday, shares in the firm, which the market values at $2.7 billion, ended flat at Rs 870.25 in a Mumbai market that closed down 1.87% after the Reserve Bank of India raised policy rates by an unexpected 50 basis points.
The World Steel Association has projected a 6% growth in the global steel demand, while domestic steel demand is estimated to grow 13.3% in 2011.
Demand in July-September will be sluggish and the margins will be under pressure but the steel maker will cut its production cost by tweaking its raw material mix and product mix, Rao said.
JSW Steel expects to refinance in about two weeks debt on the books of Ispat Steel , which it acquired in December for $476 million, he said.
The consolidated debt on the books of JSW Steel is Rs 16,300 crore.
The company’s coking coal mine in the US is expected to ship half a million tonnes of coking coal to India during the current financial year and is seen making profit from Oct-Dec, he said.
The company sold 9,000 tonnes of coal during the first quarter from its US-based coaking coal mine, it said in a statement.
The breakeven at its US plate and pipe mill unit, which is running at 22% of capacity utilisation, is expected in the next month, Jayant Acharya, director—commercial and marketing, told reporters.