JSW Steel NSE -2.08 % exported nearly 53% of its total sales volume during the June quarter of FY21. A drop in domestic demand, disruption in supply chain and acute shortage of construction labour were among the factors that led one of the top steelmakers to boost export volumes during the quarter.
"The company achieved a sales volume of 2.80 million tonnes on a standalone basis and export sales accounted for 53% of total sales volume. On a consolidated basis, export sales stood at 1.58 million for the quarter, with domestic sales at 1.21 million tonnes," JSW Steel said in a statement on Friday.
Other steelmakers too had taken a similar approach to keep inventory levels from rising. During 1Q FY21, JSPL's standalone reported sales were 1.56 million tonnes out of which exports were 0.90 million tonnes. In April and May, Tata Steel ramped up exports significantly by tapping new markets. The company also said that exports will constitute around 50% of total sales volume in Q1 FY21.
“Domestic sales volume continued to improve in the months of May and June, signaling a gradual revival of economic activities within the country,” JSW Steel said.
Despite lack of demand and a major disruption in running Ballari plant in Karnataka due to increasing number of Covid-19 cases among the workers, JSW Steel achieved an average capacity utilisation of around 66% for the June quarter , and the capacity utilisation in May and June alone was 80%.
Steelmaker, JSW Steel Ltd has reported a consolidated net loss of Rs 582 crore during the first quarter of the financial year 2021 as against a net profit of Rs 1,008 crore during the same quarter last year.
“The first quarter was marked by formidable challenges and of disrupted supply chains, unparalleled drop in demand and activity levels in the domestic markets, uncertainty in seamless inbound and outbound logistics movement, and liquidity constraints, '' the company said in a statement on Friday.
In India, economic activities are picking up across the board…however, localized lockdowns driven by the resurgence of COVID-19 cases remains a key risk to sustain the pace of recovery, said the company, JSW Steel said in a statement.
JSW Steel has reported a loss for the first time in six years. Apart from the damage caused Covid-19 led nationwide lockdowns, the consolidated earnings of JSW Steel also reflect its loss-making overseas acquisitions.
Emkay Research estimated that the company will post consolidated Ebitda at Rs 5,483/tonne and said, “We believe overseas acquisition will continue to bleed cash. We do not anticipate any turnaround in these assets in the near term”.
As per analysts’ estimates, the overseas acquisitions have impacted the company's June quarter earnings. The US Plate and Pipe Mill reported an Ebitda loss of $ 11.4 million, JSW Steel USA Ohio Inc reported an Ebitda loss of $12.54 million and JSW Steel (Italy) reported a loss of Euro 7 million during the June quarter.
"Overall, targeted access to credit and liquidity, favourable policies, and measures to support global supply chain realignments are likely to aid steady domestic economic recovery, notably from the second half of FY2021," it added.