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JSW Steel Plans to Increase Domestic Capacity to 50 Million tons and Long Steel Product Portfolio Share to 35%

JSW Steel is planning to get a higher share of long steel products in their portfolio to meet the growing demand. They aspire to increase domestic capacity from 28.2 million tons to 50 million tons by 2030 and expect the share of long steel products- bars, wires and rods, to reach 35 per cent going forward.

Aug 19, 2023

JSW Steel

The demand for long steel products has been growing from the construction and infrastructure sector in India and to meet the growing demand JSW Steel is planning to get a higher share of the product.

The Sajjan Jindal-led company is aspiring to increase its domestic capacity from 28.2 million tons to 50 million tons. G.S. Rathore, full-time director and chief operating officer of JSW Steel, reports, “We plan to take the share of long products to 35 percent when the capacity goes up to 50mt. Our focus will be on high-end long products”. The share of long products, which are mostly produced by the secondary steel producers, is 54 percent, while the share of flat products — hot and cold rolled coils used in automobiles and consumer durables — is 46 percent. In general, more long steel is consumed by a developing economy such as India because of its focus on creating infrastructure while In a matured economy such as the EU or the US, the share of flat products is more than long.

JSW has, however, focused on flat products historically as it started with a cold rolling mill. As a company policy, it sends 50 percent of flat products to downstream units for further value addition such as galvanizing, coating, or tinning. The company’s expansion, however, is centered around three locations, Vijaynagar in Karnataka, Dolvi in Maharashtra, and Jharsuguda in Odisha. In each of these places, the company can add 5mt each going forward, over and above the ongoing phase of expansion. The share of long products is about 28 percent for JSW Steel. The company produces long products in the Salem plant. About 90 percent of the product goes to the automobile sector. JSW’s renewed focus on long steel is in line with industry trends where large integrated players are looking at expanding long product portfolios, especially for the value-added segment.

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However, there is a possibility that there could be a shortfall of long products in the next 3-4 years.

“If long steel demand grows by 8-8.5 percent per annum over the next 3-4 years, we are looking at a shortfall of long products in India, unless secondary players add capacities aggressively and ramps up production quickly,” says Jayanta Roy, senior vice-president, and group head, corporate sector ratings, Icra.

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