JSW Steel sees West Asia reconstruction opportunity, warns of steel import diversion
JSW Steel expects post-war reconstruction in West Asia to create fresh demand, while warning that surplus steel from China, Japan and Russia could be diverted to India.
Summary
JSW Steel expects post-war reconstruction in West Asia to create fresh demand, while warning that surplus steel from China, Japan and Russia could be diverted to India.
JSW Steel Ltd expects reconstruction across West Asia after the ongoing war to create fresh steel demand, even as it warned that surplus exports from China, Japan and Russia could increasingly be diverted to India, posing a threat to domestic producers.
“Geopolitically, since there are challenges in the Middle East, China, Japan and Russia all have a footing there. The diversion of Middle East cargoes to Indian shores is an area of threat we need to watch,” Jayant Acharya, joint managing director and chief executive officer of JSW Steel, told Mint in an interview.
“Some cargoes have come in, and we are also seeing that China, Japan and Russia—imports from all three countries have gone up substantially. We need to watch this space, and our idea is to see that unfair trade does not happen and the surge is contained,” he said.
The twin developments could shape India's steel industry over the coming quarters. While reconstruction in war-hit regions could open new export opportunities for Indian producers, any surge in low-cost imports into India may pressure domestic prices and margins.
Acharya’s comments come as the Directorate General of Trade Remedies has initiated an anti-dumping investigation into steel imports from the three countries. He said the investigation was a welcome step to prevent surplus global steel from undermining domestic producers.
“It’s important for us to make sure that structurally we remain self-reliant and do not allow surplus global flows to hit us here,” he said.
Reconstruction play
At the same time, JSW Steel sees a potential new source of demand emerging from reconstruction across West Asia and other regions affected by war.
“You will see reconstruction demand coming up in the Middle East and other parts of the world impacted by war,” Acharya said. “I certainly see an opportunity, and whether the Indian supply chain forms a part of it, or our downstream suppliers from India supply, or certain other countries come and supply, the overall need for steel will increase.”
The chief executive added that India could play a role “whether in the Middle East as normalization starts, in Russia-Ukraine reconstruction, or Palestine.” Europe’s efforts to strengthen and rebuild infrastructure and defence could also generate additional demand, he said.
JSW Steel has already supplied API-grade steel for pipes used in Saudi Arabia’s NEOM project. Acharya said Indian steelmakers have the capability to meet the requirements of oil and gas pipe manufacturers, including X70 and X80 grades.
“Our capability of supplying oil and gas requirements to the pipe and tube industry in India is very much there,” he said. “We are able to supply X70, X80, whatever is required by the oil and gas industry.”
Cost outlook
On raw material costs, Acharya said coking coal prices, which had risen amid geopolitical disruptions and supply issues in China, have started to ease and should reflect in the company's third-quarter costs.
Thermal coal prices were more affected by the war, while coking coal was also impacted by a mine accident in China's Shanxi province and safety-related mine closures.
On iron ore, the company expects costs to moderate.
"Iron ore prices are also expected to go down, they've already started moderating, which should benefit us in Q2 to Q3," he said.
JSW Steel has also begun increasing the use of domestic coking coal in its blend, with initial trials proving successful. The company is also pursuing coking coal supplies from Mozambique, which Acharya said could lower costs through access to high-grade coal and allow greater use of higher-ash domestic coal through blending.
Balance sheet
Acharya said the company's net debt-to-Ebitda ratio stood at 1.46 times in the June quarter, while debt on the balance sheet was about ₹46,000 crore against cash of ₹21,600 crore.
JSW Steel has also been onshoring a substantial portion of its overseas debt to reduce the impact of currency movements.
"We have actually been able to build a model by which we are more or less neutralising the P&L impact going forward, so there will be very little impact on the P&L," he said.
Growth ahead
The company expects steel volumes to improve as new capacity ramps up, including the third blast furnace at Vijayanagar and operations in Ohio.
JSW Steel is also targeting an 8% growth in Indian steel demand this year, translating into an additional 12-13 million tonnes of consumption.
"India demand continues to be very strong," Acharya said. "Public capex is good, and private capex is opening up, adding to the overall demand cycle."
He said the company's steel price recovery since January had helped offset higher costs and that the outlook remained positive despite seasonal weakness.
"Going forward, apart from seasonal impact, we see strong growth directionally," he said.
JSW Steel reported a 10% year-on-year rise in consolidated revenue to ₹47,364 crore in the April-June period, beating the ₹45,109-crore consensus estimate of 23 analysts polled by Bloomberg.
The steelmaker reported a consolidated net profit of ₹4,651 crore for the first quarter of FY27, up from ₹2,184 crore a year earlier, according to exchange filings last week.
About the Author
Dipali Banka
Dipali Banka is a Mumbai-based journalist who treats corporate reporting less like a beat and more like a puzzle to be solved. This invariably means she has to read through annual reports and speak with leaders and analysts. She tracks policies, deals, and the pulse of industries spanning metals, mining, paints, and cement, alongside aviation. She started out as an intern at The Statesman and then completed her postgraduate diploma in journalism from Asian College of Journalism, Chennai, in 2025. Relentlessly curious at heart, Dipali is driven by the simple urge to understand how things work and who they impact. Armed with an enduring fascination for steel and aeroplanes, she moves through the churn of daily news with focus, turning complexity into clarity without losing the story. She is particularly committed to shaping numbers into objective narratives, having little appetite for vagueness that gets in her way.
Outside the newsroom, Dipali is an unapologetically loud presence who values long conversations and longer walks to unwind. She devours books of all kinds and can often be found indulging in the lyrical sway of contemporary ghazals. She ardently believes that her relationship with her bylines is more sacred than it would ever be with anyone across the human race.
Source: Livemint — Companies
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