JSW Steel to invest Rs 20k cr in capex this FY

JSW Steel has planned to invest Rs 20,000 crore in capital expenditure (capex) this financial year (FY) and does not expect the new export duty to impact its sales and output or reduce capacity utilisation. The fresh capex consists of Rs 18,000 crore investment in JSW Steel and Rs 2,000 crore in Bhushan Power and Steel. The company plans to spend Rs 18,000 crore to increase capacity to 36 million tonnes (mt), from 26 mt, despite moderation in demand due to a hike in interest rate. The 10 mt capacity will be added by March 2024. Joint Managing Director of JSW Steel, Seshagiri Rao, told the media that the company would not reduce capex spending despite moderation in demand or a fall in prices due to the export levy. Rao said that the company had cut its planned capex of Rs 18,240 crore to Rs 14,198 crore last FY due to the second wave of the Covid-19 pandemic. The company suggests producing 25 mt of steel and selling 24 mt this FY. Despite export duty, Rao expects shipments to be at 4.5 mt. The government had imposed an export duty of 15% on steel products to bring down increasing domestic prices. In a bid to lower production costs, the government waived off customs duty on the import of some raw materials, including coking coal and ferronickel. Rao said that steel prices have dropped by 10% in the last few days due to the trend in the international market on the back of a drop in raw material prices. He said that markets had given too much weightage to the export duty, negatively impacting the steel sector. The government has also increased the export duty on iron ore from 30% to 50%, which will reduce costs substantially. He added that steel demand in the March quarter might have fallen compared to the same period last year, but sequentially it is up 7%, indicating robust demand with government spending. Image Source Also read: JSW Steel's planned growth is equal to capacities in last 20 years