India’s steel leader JSW announced a production cut, citing oxygen shortages and a continued decline in industrial demand, and predicted that the second wave of the new coronavirus (CCP virus) outbreak currently ravaging the country will extend into September.
JSW is also suffering from the lack of vaccine for its employees, contract employees and their families, who total close to one million people, at a time when India is trying to overcome the vaccine shortage.
JSW chairman Sajjan Jindal said in an interview with the Financial Times that JSW has cut steel production by nearly 10 percent, the company’s market capitalization of 1.8 trillion rupees ($244 billion), is the country’s market capitalization ranked first in the steel industry.
JSW’s production cuts underscore the disruption of the second wave of the new crown epidemic to an Indian industry that should be booming at this time.
The epidemic dragged down India’s shrinking economy last year, but the economy and consumer demand were expected to rebound this year, and domestic steelmakers will benefit from a strong outlook for global markets.
Indian companies have had to deal with a shortage of oxygen and vaccines, a continued decline in demand, and employee diagnoses. Some companies have also announced production cuts and plant shutdowns due to the outbreak, including Suzuki Motor’s Indian subsidiary, Fengshen Suzuki.
Jindal said, “I never thought there would be a second wave of the epidemic, and with it being so violent and devastating, we clearly see the impact [on domestic demand], coming towards our company.”
But investors remain bullish on JSW, whose shares have soared 90 percent so far this year, largely due to a solid global steel market.
Recent Comments