JSW Steel - Business Outlook

JSW Steel Ltd has announced the following Outlook:

The global crude steel production continues to grow and stood at + 7.3% during the first 9 month period in 2007, mainly led by high growth in China & Asia. Chinese exports are higher in first nine months at 55 Mn MT, but the efforts of Chinese Govt. to restrict steel exports have slowed down export of steel products from China. The growth in consumption in emerging economies continues to be strong.

Indian Steel Demand growth is fuelled by strong wave of economic development. Indian economy has shown robust growth in the current financial year backed by a growth of +11% in the industrial production. Lower inflation reported recently is expected to result in lower interest rate regime, which will spur growth in Automobile and Retail sector, a big positive for steel industry. There is increase in requirement for Steel products as a result of strong demand momentum driven by massive infrastructure growth and rising consumption on increase in urbanization.

Steel Industry is in a cost push environment due to rise in prices of iron ore, coal, coke and rising freight rates on jump of crude oil prices which is expected to keep the steel product prices high.

The appreciating Rupee against US Dollar coupled with a fall in international steel prices led to an adjustment of the prices downwards in domestic market in July & August in Q2, however, steel prices started moving north, both in international as well as domestic markets starting after August 2007. In this scenario & also in view of rising global demand, the steel prices are expected to remain firm & may continue to rise further.