[Ferro-Alloys.com] Monday (May 10), India’s largest steel producer JSW predicted that India’s second wave of coronavirus will continue to cause oxygen shortages and shrinking industrial demand by September, so the company will cut production.

With a market capitalization of 1.8 trillion Indian rupees (approximately US$24.4 billion), JSW is the steel producer with the highest market value in India. Sajjan Jindal, chairman of JSW, said the company has cut steel production by nearly 10%.

The outbreak of the coronavirus last year caused economic contraction. India originally expected that the economy and consumer demand would both rebound this year. Steel manufacturers are also optimistic about the prospects of the global market. However, the production cut of JSW highlighted the second wave of the epidemic in India and disrupted the plan for the Indian industry to flourish.

Companies in India must work hard to address shortages of oxygen and vaccines, plummeting market demand, and employee infections. Other companies, including Maruti Suzuki, India's largest automaker, are cutting production and temporarily closing factories.

JSW is working hard to vaccinate the company's employees and their families, and the number of people involved totals as high as 1 million. India’s latest policy has allowed companies to cooperate with private hospitals to vaccinate employees. However, because the nationwide vaccine shortage is estimated to last until July, JSW, like other companies, has been unable to purchase sufficient vaccines.

As one of India's most powerful industrial tycoons, Jindal said: "I never thought that the second wave of the epidemic might bring such a violent and devastating blow." "We clearly see the shrinking of the Indian domestic market. The impact on our company, I think this impact will continue until September."

However, investors are still optimistic about JSW. Due to the strong global steel market, JSW's stock price has risen 90% since the beginning of this year.

Jindal said that JSW can make up for weak domestic demand through exports, and its export earnings account for about one-fifth of its total earnings. But in India, the situation remains complicated due to the deteriorating business prospects and the burden of the virus on the company and its employees.

Jindal said that JSW is now India's largest supplier of liquid medical oxygen, transporting approximately 1,200 tons of oxygen per day. He said he expects this process to last "a few months."

The epidemic in India shows no signs of slowing down. Last Sunday, more than 400,000 new cases were added, and there were more than 4,000 deaths for the second day in a row. So far, the total number of people infected with the disease in India has exceeded 22 million, with a total of more than 240,000 deaths. 

• [Editor:zhaozihao]