<article><p class="lead">Indian private-sector producer JSW Steel has set an output guidance of 24.3mn t from domestic operations in the fiscal year ending March 2023, up by 16pc from its output in the previous financial year when the company sold 19.7mn t.</p><p>JSW said it will meet the guidance on strong domestic demand growth and government infrastructure plans that will consume about 20mn t of steel over the next 2.5-3 years. It will also attempt to replace the 5mn t of steel that is imported every year through domestic output and continue to export steel on measured supplies.</p><p>The company expects Indian steel demand to grow by 7.5pc in the current fiscal year, with an incremental domestic demand of 8mn t.</p><p>Joint managing director and group chief financial officer Seshagiri Rao said the super cycle in steel will remain intact on demand driven by the energy transition, increased defence expenditure in Europe and elsewhere on the back of the Russia-Ukraine conflict, global infrastructure spend and a recovery in the automobile sector, led by electrical vehicles.</p><p>JSW said it has finalised contracts with some major automakers with an increase of 11,500-12,000 rupees/t ($148-154/t) and expects more contracts to be concluded in the next few weeks.</p><p>The company expects higher coking coal prices to have a $125/t impact this quarter and sees a drop in prices because of weak steel demand in the global market.</p><p>The producer continues to source coking coal from Russia but said it has not increased the procurement amount because of difficulties in changing the coal blend in a short space of time, and because of logistical challenges due to sanctions.</p><p>China may have lower-cost Russian coking coal, but the country has been curbing production and the stimulus measures made by the government will help revive its economy and domestic steel demand, while keeping exports limited, said deputy managing director Jayant Acharya.</p><p>JSW expects to source 53pc of iron ore from captive mines this fiscal year and is ramping up production at both Karnataka and Odisha mines.</p><p>Rao said the <a href="https://direct.argusmedia.com/newsandanalysis/article/2334026">export duty on iron ore concentrates and pellets</a> will bring down prices, adding that the Indian seaborne iron ore market is not sizeable, and with China using more scrap and increasing domestic production, demand for Indian iron ore could drop and prices will not remain elevated.</p><p>The company announced a merger with 950,000 t/yr JSW Ispat Special Products and plans to expand its capacity to 1.2mn t/yr by the third quarter this year.</p><p class="bylines">By Sumita Layek</p></article>
