With the re-opening of economies globally, and construction activities gaining traction, demand for steel has seen a steady rise in Q3FY22.  However, while steel production for listed steelmakers increased it was below expected levels. While JSW Steel’s production rose 8% QoQ to 4.4 million tonnes, Jindal Steel’s production rose a mere 2% QoQ. Analysts from Geojit BNP Paribas reckon JSW Steel’s new plant at Dolvi helped boost production in Q3FY22. Jindal Steel’s production rose to 1.96 million tonnes helped by its leasing of Kasia iron ore mine from Odisha government in September 2021.

Tata Steel’s production rose a mere 1% QoQ in Q3FY22, weighed down by its acquisition of Tata Steel BSL, which is now delisted. Analysts from Motilal Oswal reduced their production volume estimate for Tata Steel BSL to 1.1 million tonnes for FY22 from 4.6 million tonnes. This could be one of the reasons for Tata Steel’s management expecting volumes to be flattish in Q4FY22 as well. 

Steel Authority of India’s (SAIL) production rose  5% QoQ to 4.5 million tonnes. The company expects demand to revive in Q4FY22, however, production may remain flat as input costs stay high.

Even with a muted rise in production, steel companies have scope to grow further. A report from ICRA suggests that the steel industry’s capacity utilization is likely to touch 80% by the end of FY23 and steel production capacity is likely to increase to 40 million tonnes per annum by FY22-26. This is double the steel production levels of FY17-21.