Cheap imports to hit margins, says Sajjan Jindal

JSW Steel expects rampant import of cheap steel amid global gloom to hit margins if it continues unabated.

Addressing shareholders at the company’s annual general meeting, Sajjan Jindal, Chairman and Managing Director, JSW Steel said global steel demand remains weak, leading to rising imports into India and affecting domestic steelmakers’ margins.

This is mainly because of elevated Chinese production and exports, pressuring global steel markets, he said.

Several countries have raised barriers against steel imports, and the Indian steel industry is engaged with the government to ensure a level playing field, said Jindal.

Geopolitical risks remain high, particularly regarding their impact on commodity and energy prices.

Mirroring India’s growth, domestic steel demand increased 14 per cent in FY24, outpacing economic growth significantly.

This was driven by infrastructure development and robust demand from all major steel-consuming sectors, he said.

Expansion plan

To meet India’s growing steel demand, JSW Steel plan to expand capacity to 50 million tonnes per annum in India by FY’31. The Board recently approved a 5 mt expansion at Dolvi, increasing our India capacity to 42 million tonnes and total capacity to 43.5 million tonnes by September 2027.

From its inception 25 years ago as a greenfield project on barren land, Vijayanagar plant has evolved into India’s largest single-location integrated steel plant with a capacity of 12.5 mtpa.

“Our ambitious vision continues as we strive to expand this capacity to 24 mtpa, aiming to make it the world’s largest,” he said.

JSW Steel is focusing on increasing captive iron ore production and have 24 mines, with 13 currently operational.

It is also working on operationalising three coking coal mines in India, which could provide 2 million tonnes per annum of lower-cost coking coal compared to imports.

The Minas de Revuboe mine in Mozambique will give access to over 800 million tonnes of high-quality coking coal reserves, he said.

Green energy focus

The company recently announced the addition of 600 MW of solar and wind energy, combined with 320 MWh of battery storage at Vijayanagar.

It has plans to establish a green steel manufacturing facility, initially at 2 million tonnes per annum and expandable to 4 million tonnes, said Jindal.

Looking ahead, he added India’s outperformance is expected to continue, with rising capacity utilisation levels and healthy balance sheets boosting private capex.

Investments in energy transition and the PLI scheme are additional tailwinds, he said.