, : Amidst a recovery in global steel prices and the upcoming general elections, maintains an optimistic outlook for the domestic steel market for the fourth fiscal quarter, expecting a notable uptick in steel volumes, Jayant Acharya, joint managing director of the company, said in an interview.

“I expect the volumes will be better, driven by a seasonally strong quarter. The global steel prices in the last month have improved in the US, Europe, and China, as well as in the Asian regions,” he said, adding that the buoyant global prices should translate into better pricing even in the domestic market. Steel exports, too, should see an uptick in the January-March quarter, he said. “We are witnessing a better global environment for exports and that should increase the export volume, which we are already seeing in the order book. So, stronger volumes in the fourth quarter should be possible,” Acharya said. As the country gears up for general elections, Acharya is hopeful that the government will maintain its focus on public capital expenditure, manufacturing growth, and energy transition initiatives, leading to higher demand for steel. “The overall steel demand for the decade in the medium term should be good. And we will continue to look at the domestic Indian market and put capacities accordingly,” he said. JSW Steel’s domestic sales in the third quarter (October-December) increased just under 5% from a year earlier to 5.8 million tonnes, chiefly driven by increased sales to industrial customers in the auto, renewable energy, and packaging industries. Exports, meanwhile, were at about 550,000 tonnes, constituting just 9% of the company’s sales. This, Acharya said, was largely a consequence of the subdued global markets and aggressive pricing by Chinese producers. The company also experienced an increase in raw material prices as coking coal and iron ore prices inched upwards during the quarter. Acharya expects it to continue being a concern in the current quarter. “I think coking coal prices could increase by $20-25 (per tonne). Iron ore prices are also elevated,” he said. “I expect that some of that will be mitigated through higher volumes and a better mix both from better export pricing and some improvement possibility in the domestic market.” The company’s board last Thursday approved raising 2,000 crore by issuing bonds in the domestic market. The company will raise the capital as required for refinancing some of its maturing debt as well as for capital expenditure, Acharya said. The company’s weighted average cost of debt in the October-December quarter was 7.3%. This comes as the company cuts down its capex target for FY24 from the earlier 20,000 crore to 18,000 crore. “Our total capex which we have spent is 13,250 crore in nine months (April-December 2023), which is a run rate of about 4,400 crore. We have indicated that at these run rates, we may be closer to 18,000 crore. It’s more of a timing issue. We are spreading some of our cash flows into the next few months.” The company he said, spent 5,253 crore as capital expenditure in the quarter ended December 2023, as against 3,800 crore in the second quarter. Meaning, it spent substantially more during the quarter prioritizing some of its expansion projects. The company, he added, will be spending around 4,700 crore in the last quarter of the fiscal as well. Livemint tops charts as the fastest growing news website in the world to know more.

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