JSW Steel plans to levy surcharge on sale of steel products
Steel

JSW Steel plans to levy surcharge on sale of steel products

To balance the soaring input cost, domestic steel giant JSW Steel is proposing to levy a surcharge on steel products to its long-term OEM (original equipment manufacturer) customers, as per a top company authority.

JSW Steel will be the first firm to bring in the idea of surcharge to the domestic steel market.

Seshagiri Rao, Joint Managing Director and Group CFO, JSW Steel, told the media that there is immense pressure on the production cost. The rate per tonne steel production surged by 19% or Rs 6,600 per tonne quarter-on-quarter in July-September 2021.

The cost of coking coal -- a key steelmaking raw material for which players remain reliant on imports, has similarly surged from $120 a tonne to $400 a tonne in merely four weeks.

When asked whether the firm is considering passing on the burden of enhanced raw material and production value to its customers in the form of duty or surcharge, he answered in surety.

The coking coal prices surged by four times from $120 per tonne to $400 a tonne in just the past four weeks. Thermal coal costs have increased.

The surcharge concept would be new to India but it is not new in the global markets, he said.

Responding to a question if it would be possible to levy a surcharge on the sale of steel products in the high price-sensitive Indian market, the official told the media that JSW Steel will take its customers into confidence for this new idea.

Rao further said that there are three parts where the sales are made. The segments are particularly retail, exports and the OEM (original equipment manufacturer) customers.

In the retail segment, there is already a cost fluctuation on a regular basis, so the surcharge idea would not work in this section, and in the exports, costs rely on several other markers.

The third segment is OEM customers with long term relationships, where it is feasible. The idea has to be explained to them.

Image Source


Also read: JSW Steel to cut down carbon emissions by 23% till 2030

To balance the soaring input cost, domestic steel giant JSW Steel is proposing to levy a surcharge on steel products to its long-term OEM (original equipment manufacturer) customers, as per a top company authority. JSW Steel will be the first firm to bring in the idea of surcharge to the domestic steel market. Seshagiri Rao, Joint Managing Director and Group CFO, JSW Steel, told the media that there is immense pressure on the production cost. The rate per tonne steel production surged by 19% or Rs 6,600 per tonne quarter-on-quarter in July-September 2021. The cost of coking coal -- a key steelmaking raw material for which players remain reliant on imports, has similarly surged from $120 a tonne to $400 a tonne in merely four weeks. When asked whether the firm is considering passing on the burden of enhanced raw material and production value to its customers in the form of duty or surcharge, he answered in surety. The coking coal prices surged by four times from $120 per tonne to $400 a tonne in just the past four weeks. Thermal coal costs have increased. The surcharge concept would be new to India but it is not new in the global markets, he said. Responding to a question if it would be possible to levy a surcharge on the sale of steel products in the high price-sensitive Indian market, the official told the media that JSW Steel will take its customers into confidence for this new idea. Rao further said that there are three parts where the sales are made. The segments are particularly retail, exports and the OEM (original equipment manufacturer) customers. In the retail segment, there is already a cost fluctuation on a regular basis, so the surcharge idea would not work in this section, and in the exports, costs rely on several other markers. The third segment is OEM customers with long term relationships, where it is feasible. The idea has to be explained to them. Image Source Also read: JSW Steel to cut down carbon emissions by 23% till 2030

Next Story
Infrastructure Energy

REC Transfers HVDC Project to Power Grid

REC Limited has successfully handed over the Special Purpose Vehicle (SPV) for a High-Voltage Direct Current (HVDC) transmission project to Power Grid Corporation of India Limited (PGCIL). This strategic move aligns with the nation's objectives to strengthen its power transmission network. Key Highlights: Project Overview: The HVDC project, under the inter-state transmission system (ISTS) initiative, is a critical component of India's push toward robust and efficient electricity transmission. It aims to handle bulk power transfer across long distances while ensuring minimal losses. Role of RE..

Next Story
Infrastructure Transport

NF Railway Collaborates with IIT Guwahati

The Northeast Frontier (NF) Railway has signed strategic Memorandums of Understanding (MoUs) with IIT Guwahati to foster technological advancements and improve railway operations in the region. This partnership focuses on innovative solutions to enhance safety, efficiency, and sustainability in rail infrastructure. Key Highlights: Purpose of MoUs: The collaboration aims to leverage IIT Guwahati's expertise in technology and research for implementing cutting-edge solutions across railway operations. Key areas of focus include: Automation and digitization in maintenance. Sustainability initiati..

Next Story
Infrastructure Transport

Danapur Division Modernization Plans Revealed

The Railway Board has unveiled ambitious plans for the expansion and modernization of the Danapur Division, a critical hub under the East Central Railway. The initiative focuses on infrastructure development, enhanced passenger amenities, and operational efficiency. Key Highlights: Scope of Modernization: The Railway Board's blueprint emphasizes: Upgrading existing infrastructure to accommodate more passenger and freight traffic. Improving station facilities, such as platforms, waiting areas, and connectivity. Introducing advanced signal systems for safer and smoother operations. Freig..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000