JSW Steel expects coking coal price to rise $100/tonne in Q3FY22
Seshagiri Rao, Joint Managing Director and Group Chief Financial Officer at JSW Steel, expects to see USD 100 per tonne increase in coking coal prices in Q3FY22. According to him, very high cost pressure is keeping steel prices at elevated levels. He expects it to increase further.
Seshagiri Rao, Joint Managing Director and Group Chief Financial Officer at JSW Steel, expects to see USD 100 per tonne increase in coking coal prices in Q3FY22.
“There was an increase of USD 30 per tonne in coking coal prices in Q2FY22. Looking at the current pricing scenario, we expect USD 100 per tonne increase in coking coal prices in Q3FY22,” he said.
He further said, “As far as steel prices are concerned, there has been some correction in the latter part of Q2FY22; because of the surge in the prices of coking coal, globally the steel prices have started looking up. At the same time, the demand is reasonably strong in the rest of the world other than China.”
“We feel that very high cost pressure keeps steel prices at elevated levels. It will go up further than what they are today,” he said.
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JSW Steel recently reported its Q2FY22 numbers. The company reported a 350 percent year-on-year (YoY) jump in consolidated net profit to post its highest quarterly profit of Rs 7,179 crore for the second quarter ended September 30. In the corresponding quarter last year, the company posted a net profit of Rs 1,595 crore. The company also reported its highest-ever quarterly revenue from operations at Rs 32,503 crore for the quarter under review. It was Rs 19,264 crore in the corresponding period of last year. It also registered its highest-ever consolidated operating profit or EBITDA for the September quarter at Rs 10,417 crore.
Rao said, “Net sales realizations have gone up by 5 percent quarter-on-quarter (QoQ) in Q2FY22.”
As far as auto companies are concerned, some contracts were finalized. “Part of it got reflected in the last quarter. Where the negotiations are not complete, a significant portion has not come in the last quarter. So negotiations are going on as far as the auto sector prices are concerned,” he said.
The company has commissioned the largest 5 million tonne brownfield expansion in India. “We have commissioned the 5 million tonne big blast furnace. This will give incremental volumes in the next quarter. Instead of focusing on EBITDA per tonne on a blended basis, what we need to do is absolute EBITDA,” Rao mentioned.
For the full interview, watch the accompanying video.
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(Edited by : Dipikka Ghosh)
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