JSW Steel, one of the leading Indian steel producers, has announced that it will commission equipment within the scope of its Dolvi expansion project in the June-September period this year, while previously the company had expected the launch by March 31, 2020, according the official announcement.
The delay is connected with the monsoon extension for October and part of November, which impacted construction activities at Dolvi and partly at Vijayanagar, according to Seshagiri Rao, joint managing director of JSW Steel. Nevertheless, after the launch the producer is going to ramp up the new facility fast. Even taking into account the commissioning and ramping up period in the first six months of FY 2020-21 (April-September), the capacity of the new facility is 5 million mt per year, and so there will be sizable growth of sales volumes in the full FY 2020-21. The Dolvi plant has 5 million mt of annual capacity at the moment.
Though the expansion project aims to add 5 million mt of HRC per year, the final sales of HRC by the company will increase by a maximum 2.5 million mt per year in case of 100 percent utilization rate of the new equipment. “Out of our 4.5 million to 5 million tonnes which this project will give in terms of hot rolled coil, about 50 percent of that is linked backwards to our downstream operations,” Seshagiri Rao said during a press conference. JSW Steel is also going to buy Asian Colour Coated Ispat (300,000 mt of CRC capacity with further production of HDG and coated steel products), the re-roller which may consume some additional HRC volumes in the future.
JSW Steel will try to sell additional HRC volumes in the local market as the company expects steel demand in India to grow faster in the next fiscal year at 5-6 percent compared to four percent or lower for this year ended on March 31., and so “you will see an incremental demand between 5 million and 6 million tonnes in India,” said Jayant Acharya, director of commercial and marketing at JSW Steel.
However, taking into account the high additional volumes, the export market will also be important for JSW Steel. Exports of the producer totalled 949,000 mt in the October-December period, slightly below the previous quarter when it reached 1.09 million mt, but still high compared to last year. “In quarter four [January-March], given the current market situation, we do expect that exports will get moderated a bit. However, with international prices having gone up, we will take a view vis-à-vis the price available in this quarter in the domestic market and international market and then calibrate our tonnages accordingly,” Jayant Acharya mentioned.
