India: JSW Steel's crude steel output edges down, sales increase q-o-q in Q2FY24

Indian private steel major JSW Steel's crude steel production edged down, while the sales volumes rose q-o-q in Q2FY24, SteelMint learnt from company's investors call held on 20 October 2023. The company has set FY25 crude steel production guidance at 37 mnt, and has maintained more than 50% share of value added and special products (VASP) in total sales.

In Q2FY24, the company's capex spend was INR 3,701 crores and during H1FY24, capex spend was INR 7,795 crores against the planned capex spend of INR 18,800 crore for FY24.

Update on projects-

a) Vijaynagar

• Construction activities are currently ongoing for all packages at the Vijayanagar. The refractory erection is in progress for the BF package, and one convertor has been fully erected at the Steel Melt Shop (SMS). The entire project is expected to be completed by the end of FY24.
  
  
• The 1.5 mtpa coke oven plant has been fully completed and commissioned. Furthermore, the capacity enhancement of 1.5 mtpa to support 5 mtpa steel making is expected to be commissioned from Q1FY25.
  
  

b) Bhushan Power & Steel Limited's (BPSL) phase-II expansion (3.5 to 5 mtpa):

Odisha:

• The Odisha plant in its expansion phase is likely to get the Steel Melting Shop-2 (SMS) commissioned in Q3FY24.
  
  
• Work is in progress for the civil, structural and equipment erection activities for the wire rod mill-2 and the lime calcination plant- 6.
  
  
• These are projected to complete by the end of FY24.
  
  

Jammu and Kashmir:

• Civil work at site and equipment erection is being worked upon at the 0.12 mtpa colour coating line.
  
  
• The company estimates the completion of the above unit by FY24.
  
  

Other highlights

• Crude steel production falls q-o-q: The company's standalone crude steel output stood at 5.40 million tonnes (mnt) in Q2FY24, down 1% q-o-q from 5.44 mnt in Q1FY24 due to maintenance shutdowns taken during the quarter. However, the same rose by 9% y-o-y compared with 4.95 mnt in Q2FY23.
  
  
• Steel sales rise q-o-q: Steel sales recorded 10% growth on q-o-q basis to 5.41 mnt in Q2FY24 against 4.93 mnt in Q1FY24 driven by robust domestic demand and reduction in inventory. Also, sales volume increased by 8% y-o-y as against 5.01 mnt in Q2FY23.Exports accounted for 11% of total sales during the quarter and VSAP constituted for 62% of total sales.
  
  
• Operating EBITDA increases q-o-q: The company's operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was recorded at INR 6,898 crores in Q2 FY24, higher by 42% on q-o-q basis against INR 4,861 crores in Q1FY24. EBITDA was higher primarily due to lower coking coal cost, partially offset by lower steel realisations.
  
  
• Coking coal costs: There was a drop of $54/t in coking coal costs to $251/t in Q2FY24. The company expects coking coal prices to go up by $30/t in the upcoming quarter.