India’s JSW Steel Ltd is evaluating opportunities to expand its footprint into Europe, including Italian longs producer Aferpi, JSW Chairman and Managing Director Sajjan Jindal said.
“It is one of the projects we’re looking at,” Jindal told S&P Global Platts on the sidelines of the World Steel Association’s annual meeting in Brussels. “That’s part of our strategy, to expand globally.”
JSW is thought to be one of up to eight entities interested in acquiring Aferpi. Its owner, Cevital, has until the end of October to submit a final industrial plan to the Italian government for approval.
The facility has been operating off and on over the past few months, and its rail mill — the only unit currently online — was recently restarted to produce a 15,000 mt rail order for Ferrovie dello Stato.
Jindal didn’t elaborate on JSW’s potential plans for Aferpi. JSW currently sells 75-80% of its output within India, with the rest going to markets including Africa, South America, Europe and eastern Asia, he said.
“I think Europe is more on the agenda right now,” Jindal said of the company’s expansion plans.
The Indian steel market is currently experiencing 4-5% annual demand growth, he said.
“Globally, if you see 4-5% it’s a very healthy rate, but in India we need to grow at about 8-10% steel consumption because we are looking at 8% growth in GDP, and steel is always 1.2-1.25 times the GDP growth,” he said.
“So, that’s the situation as we speak. Nevertheless, the steel industry is quite robust in India.”
Indian investment in infrastructure, along with a vibrant auto and machine industry, is driving steel consumption there. Solar energy is an emerging sector, as well, Jindal said.
“The world is now going to solar in a big way,” he said. “Solar is quite steel intensive, so we will be doing that.”
Jindal said raw material price volatility, “especially on the coal side,” is one current challenge for steelmakers. His outlook for steel demand next year is mostly bright.
“I feel it will be a good year, like 17,” Jindal said. “I feel it will be stable to positive.”
Source: Platts