input costs will aid the margins of JSW Steel over the remainder of the ongoing financial year, especially in the latter half, Jayant Acharya, the company’s joint managing director, told ET. The selling price of the alloy has bottomed out after coming under pressure in recent months, and it should remain «range bound» at current levels, Acharya said. Prices of benchmark hot-rolled coils (HRC) of steel are in the range of Rs 55,000-56,000 a tonne before taxes, data show.
Meanwhile, on the input cost side, prices of coking coal have come down in recent weeks, Acharya said, adding that the company expects its average cost of coking coal to be lower by Rs 3,700-4,100 per tonne in the ongoing quarter compared to the April-June period. The raw material is trading around Rs 19,000 per tonne before shipping costs. Iron ore prices should also soften in the ongoing quarter, he said.
Production cuts are anticipated during the ongoing quarter in China, where more than half of the world’s steel is produced, which also will put a pressure on iron ore prices. There will be some negative impact on margins from lower prices during the ongoing quarter, Acharya said, but performance in the half of FY24 should be better. “We expect a much better H2,” he said.
Performance of steelmakers also suffered during the first fiscal quarter as buyers reduced their inventories in anticipation of higher price cuts in the open market. This resulted in accumulation of stock with steelmakers, including JSW Steel. The company produced 6.43 million tonnes of steel during the quarter but sold only 5.71 million tonnes at a consolidated level.
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