JSW surges 6.3% on higher steel production

MUMBAI: JSW Steel, the third largest listed steel company in India, produced steel products of around 1 million tonnes during the Mar���09 quarter, 10.5% higher compared to the same quarter last year. The stock market seems to have taken the news positively as JSW���s stock surged 6.3% on Monday compared to 2.6% rise in BSE Metal Index.

For JSW Steel, like other steel producers in the country, Mar���09 quarter has been better than Dec���08 quarter, thanks to revival in demand and seasonality factor. As per reports, the sales volume for JSW Steel could be more than its quarterly production. Sales are expected to be at around 1.2 million tonne, a year-on-year growth rate of around 20%. However, the impact on topline of the company might not be very significant considering the fact that domestic steel prices are 15-20% lower from their year-ago levels.

Production and expected sales volume growth in Mar���09 quarter is much better than Dec���08 quarter. JSW Steel reported 17% y-o-y decline in sales volume and 16% y-o-y rise in sales realization during Dec ���08 quarter.

For JSW, flat products like hot-rolled coils, which accounts for 85% of total volume, recorded a growth of 6%, thanks to sharp rise in demand from auto sector in February. The long products recorded a growth of around 50% with higher demand from infrastructure and construction sector.