Sajjan Jindal-controlled JSW Steel will cut production by 20% starting this month in the wake of the current market turmoil. JSW will utilise the time for general maintenance of its facilities. The company plans to rationalise its product-mix as well. At the end of September, JSW was carrying an inventory of 2 lakh tonnes compared to a production of 3.5 lakh tonnes a month. Moreover, there was some inventory build-up in October as well.
The normal inventory level for the steel industry is of seven days, which has now increased to three weeks. In tandem, prices have crashed over the last 2-3 months. Hot rolled coil, which was selling at $1,200-1,250 a tonne is now at $600-700 a tonne.
At present, JSW has a production capacity of four million tonnes at Vijaynagar and another one million tonne capacity at Salem. By December, capacity at its Vijaynagar facility will go up to seven million tonnes.