Jindal Steel and Power Ltd(JSPL) continues to show that the recovery in the steel cycle is taking hold. Besides, iron ore inventories at its Sarda Mines is also helping production. The stock gained 1% on Monday due to higher crude steel production. The firm’s November production jumped 15% year-on-year, which is a shade higher than October’s 13% growth. This shows JSPL is sustaining its double-digit run rate witnessed in October.
This is also higher than peers such as JSW Steel Ltd, which saw a 3% rise in crude steel production, albeit on a larger base. JSW Steel, however, has said that shortage of iron ore constrained its capacity utilization.Another positive is that JSPL’s iron ore inventories are in place, which is aiding the company at a time when iron ore is in short supply. Besides, iron ore prices have risen considerably and are near their all time high, which should assist margins in the coming quarters. Further, JSPL also has coal inventory to last till February 2021. However, the price of coal after February will need to be watched.
Courtesyg: Google (photo)
