Iron ore duty hike will temper steel price rise: JSW

Our Bureau Mumbai | Updated on March 07, 2011

The JSW Steel Vice-Chairman and Managing Director, Mr Sajjan Jindal, said on Monday that though coking coal and iron prices are on a high, any further hike in steel prices could hurt demand in the country.

However, the Budget proposal to increase the iron ore export duty to 20 per cent should alleviate some concerns and lead to drop in prices of around Rs 1,000 a tonne in the next two-three months, he said.

“With the economy and manufacturing sectors growing rapidly, demand is bound to grow, but the ability to absorb further price hikes is limited and prices will rise in the short-term. But the Government has done a very good thing by proposing the export duty on iron ore at 20 per cent. It will increase availability of iron ore for domestic companies and prices could come down by as much as Rs 1,000 a tonne over the next 2-3 months,” said Mr Jindal, while speaking at the sidelines of an event for the launch of a book, ‘In Search of Change Maestros' by Mr Pritam Singh and Ms Asha Bhandarker.

Most steel companies such as SAIL, Tata Steel, JSW Steel and Essar Steel have hiked prices by about Rs 2,000 a tonne in last two months citing surge in cost of iron ore and coking coal prices.

Auto grade steel

JSW said that its technical collaboration with Japanese steelmaker JFE for auto-grade steel will start production of a few grades this year, with complete commercial production starting from early-2012. Last year JFE invested $1 billion into JSW for an around 15 per cent stake.

JSW expects production to reach 14.3 million tonnes per annum (MTPA) next year, from the present 7.8 MTPA capacity.

Output up 8% in Feb

JSW Steel has reported a growth of 8 per cent increase in crude steel production at 541,000 tonnes (502,000 tonnes) in February. Flat product output jumped 48 per cent to 442,000 tonnes (300,000 tonnes) while long product production dipped 22 per cent to 75,000 tonnes (96,000 tonnes) as the company focused on producing more value-added products.

Part of the O.P. Jindal Group, JSW Steel has the largest galvanising and colour coating production capacity in the country and is the largest exporter of galvanised products with a presence in over 100 countries across five continents.

It manufactures HR coils, CR coils, galvanised products, auto grade, white goods grade CRC steel, besides bars and rods.

The company's shares on the BSE were down three per cent at Rs 920 on Monday.

Published on March 07, 2011

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