Marred by inferior quality of iron ore, JSW Steel on Monday-reported a decline of over 24 per cent in steel production for February at 6.10 lakh tonnes (LT) compared to the January production level of 8.05 LT.
However, on a year-on-year basis, the company’s production was up by 12.75 per cent in February, while for the first 11 months of the fiscal, the company had produced 6.77 million tonnes of the metal alloy, up 15 per cent.
“The crude steel production during February 2012 was severely impacted due to usage of inferior grades of iron ore,” company’s Joint Managing Director and CFO, M r Seshagiri Rao said in a statement.
He added that quality of iron ore being offered in the Supreme Court mandated E—auction is deteriorating “substantially” as the raw material stock of 25 million tonnes is getting exhausted.
“Further certain iron ore in E—auctions contained high Alumina, Silica, Manganese and Low Fe, which led to poor Sinter quality, high slag formation and low productivity in the Blast Furnaces (in February),” Mr Rao said.
The company had cut down its production levels by up to 70 per cent in the second half of the last year due to iron ore crunch in Karnataka, following a Supreme Court ban on mining in the state.
However, it had reported a rise of 19 per cent in production for the October—December quarter to 19.39 lakh tonnes, when iron ore supplies started improving.
“Steel industry in Karnataka region, therefore, is not only facing shortage of iron ore but poor quality of iron ore is impacting the equipment, productivity and efficiency,” it added.
JSW shares were down 3.14 per cent to Rs 761.50 apiece on the BSE in the late afternoon trade.