Mumbai: India’s biggest steelmakers are set to expand production to a record after reporting solid quarterly earnings amid strong steel prices.
JSW Steel Ltd. posted record net income Wednesday and outlined a $6 billion plan to raise output. Tata Steel Ltd., which aims to double domestic capacity, swung to profit, helped by a one-time gain.
Both mills are ramping up to meet an anticipated surge in domestic consumption with the government set to spend trillions of dollars on expanding infrastructure. Paving the way are the best market conditions in years as prices are bolstered by lower exports from China, the world’s biggest producer.
Mills around the world are also benefiting. ArcelorMittal, the biggest, posted its best quarterly profit in six years last week, and Thyssenkrupp AG said earnings at its metal-making division more than doubled.
JSW sees Indian steel consumption rising by as much as 7.5% in the 2019 financial year, supported by a government push for infrastructure projects and strengthening consumer demand, said joint-managing director Seshagiri Rao.
“The medium term demand growth outlook is quite constructive," he said.
The Mumbai-based producer aims to boost steelmaking capacity by 37% to 24.7 million metric tons a year by March 2020, the company said in its earnings statement.
Tata Steel is aiming to double capacity in India to 26 million tons in five years. Both producers will expand their own facilities while seeking to snap up some of the distressed assets for sale under India’s new bankruptcy laws.