Companies

JSPL sales decline during second wave of Covid

Our Bureau New Delhi | Updated on June 08, 2021

Slowdown in domestic construction activities, adverse weather conditions cited as reasons

The April sales of Jindal Steel & Power Ltd (JSPL) declined by a steep 29 per cent on a month-on-month basis to 5.59 lakh tonnes of steel, the firm said on Tuesday. Sales during May fell by another 11 per cent on a month-on-month basis to 4.99 lakh tonnes, JSPL said in a statement. It attributed the reduction to the “slowdown in domestic construction activities due to Covid-19 and logistical challenges faced owing to congestion at ports due to adverse weather conditions” as two cyclones hit the Indian shorelines.

Also read: Why you should hold on to JSPL stock

“JSPL continues to take measures to offset the impact of slowdown in domestic demand by exporting in lucrative global markets,” the firm said. Exports accounted for 21 per cent of sales volumes in April, with the share rising further to 36 per cent in May.

Steel production

The production of steel during April fell by 6 per cent on a month-on-month basis to 6.81 lakh tonnes. Production during May picked up slightly to 6.9 lakh tonnes, JSPL said. On a year-on-year basis, total production during the April-May period grew by 31 per cent largely due to the nationwide lockdown enforced during the corresponding period last year.

JSPL has supplied about 3,500 tonnes of Liquid Medical Oxygen (LMO) till date, the firm said. “With the Covid-19 situation improving, we remain confident of achieving FY22 production target of 8.0-8.5 million tonnes,” the firm said.

Meanwhile, international and domestic steel prices are likely to slide down as Chinese demand for key raw material iron ore will be diminished during the country’s June-July season of higher temperatures and rains leading to weaker construction activity.

“We expect regional steel prices to be subdued in the near term, particularly as China HRC prices have corrected by more than 10 per cent in the past three weeks,” Motilal Oswal Institutional Equities said on Tuesday.

Published on June 08, 2021

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