The Hindu Business Line : JSW Steel to cut output by 20% in Nov

Mumbai, Nov. 7 Announcing a five per cent growth in crude steel production to 3.38 lakh tonnes for October over the corresponding period of last year, JSW Steel said it plans to rationalise its product mix and the production programme was being modified according to market conditions to cut production by about 20 per cent per cent in November.

The company intends to use this time for maintenance.

The company’s Finance Director, Mr Seshagiri Rao, confirmed the development, while saying that the situation would be reviewed in December.

Delays plant commissioning

A few weeks ago, Mr Sajjan Jindal, Vice-Chairman and Managing Director, said in the light of a slowdown in demand the company was likely to see a build-up of inventory, especially in CR coils. The company has also postponed commissioning of its 3-million-tonne blast furnace at Bellary to December. The commissioning of the furnace would result in finished steel capacity going up to 6.8 million tonnes as against 3.8 million tonnes.

An Essar Steel spokesperson said the company was operating at only 75 per cent capacity.

In mid-October, Tata Steel Group’s UK subsidiary Corus said it had decided to cut crude steel production by one million tonnes over the next three months.

The company said the move was taken to mitigate the effects of a softening near-term steel demand outlook and align production with demand that has been affected by the consequences of the global financial crisis.

Price cuts

Last week, JSW slashed HR coil prices by Rs 5,500 a tonne. Essar Steel and state-run SAIL had also lowered their prices by Rs 4,000 to Rs 5,500 a tonne.

Analysts said it was only logical to cut production and reduce inventory rather than keep producing and slashing prices.

Related Stories:
JSW Steel net down 38% on forex loss
JSW to cut steel prices this month

More Stories on : Outlook | Steel

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page