Sajjan Jindal-controlled JSW Steel will cut production by 20 per cent starting this month in the wake of the current market turmoil. According to a company release, JSW will utilise the time for general maintenance of its facilities. The company plans to rationalise its product-mix as well. At the end of September, JSW was carrying an inventory of 2 lakh.. tonnes compared to a production of 3.5 lakh tonnes a month. Moreover, there was some inventory build-up in October as well.

Industry sources said that the normal inventory level for the steel industry is of seven days, which has now increased to three weeks. In tandem, prices have crashed over the last 2-3 months. Hot rolled coil, which was selling at $1,200-1,250 a tonne is now at $600-700 a tonne.

At present, JSW has a production capacity of four million tonnes at Vijaynagar and another one million tonne capacity at Salem. By December, capacity at its Vijaynagar facility will go up to seven million tonnes.

In October, the company posted a five per cent growth in crude steel production over the same period last year, the company said in a filing to the BSE. The total steel production stood at 3.38 lakh tonnes for the company. Shares in JSW Steel closed at Rs 302, down 10.49 per cent. JSW Steel belongs to JSW Group, part of the $8 billion OP Jindal Group.

source: Businesslines

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