The Supreme Court has allowed resumption of mining operations in Karnataka which had been banned initially due to the rampant illegal mining in the state. With the ban being lifted JSW steel is all set to reap the benefits and can now produce iron ore from its mines in Karnataka and resume the manufacture of more steel products.
Seshagiri Rao, Joint Managing Director of JSW Steel said that the depreciating value of Indian Rupee might cause a transitional loss to JSW and affect its profits. Steel is being sold not only in India, but also in the global market so the Dollar will have an impact on the company. The Depreciating value of rupee can also help us generate more revenues in domestic sale.
Increasing prices in case of landed steel prices is also possible according to Seshagiri Rao, as the domestic market price is co-related with the price of imported steel. With demand not very strong the market price could be determined on the basis of landed cost. The method of pricing in the domestic market follows the same trend since the past many years. If rupee is around 59.50-60/USD, the landed cost is not a cause for worry.
JSW is looking forward for a quarterly or monthy depreciation of around 10%. In context to this, Seshagiri says that the prices of iron ore, steel and coking coal are falling in the international market with a fall in value of rupee. So an overall impact of the market has to be looked upon by the JSW.
The company has to take care of how much has to be passed on to the customers and how much should not. So they are working with various industries and the customers in order to bring in some increase for the company.