Ladies and gentlemen, good day and welcome to Jindal Steel and Power Limited, JSPL in 2QFY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jaisandeep Chadha from Nomura. Thank you, and over to you.
Thank you, Yashaswin. Good evening, everyone, and thank you for joining the call. Without much further ado, I'll hand over to Mr. Vishal Chandak, the head IR for JSPL. Vishal, over to you.
Thank you very much, Jaisandeep. Good evening, everyone. On behalf of Jindal Steel and Power, I'm joining you all today for the investors' briefing. We have with us Mr. Pankaj Malhan, CEO for the Angul plant, Mr. Sunil Agrawal, the CFO. Unfortunately, Mr. Sabyasachi Bandyopadhyay, our full-time director, had to go for an urgent work. He could not join the call. So I will hand over the call to Sunil for his opening remarks, thereafter which we'll take up the Q&A. Over to you, sir.
Thanks, Vishal. So good evening, everyone. Wish you a very happy Diwali, and hope you have all enjoyed the festival season. I welcome you all to the Q2 FY25 performance briefing of JSPL. India's steel production for the quarter was 36.2 million tons, down 1% quarter-on-quarter basis. However, apparent steel consumption grew 4% sequentially. Steel prices remained under pressure due to continuing surging imports and declining exports. Exports continued to trend down by 15% on quarter-on-quarter to 1.3 million tons, while imports saw a sharp increase of 44% sequentially to 3.2 million tons. India remained the net importer of steel for the second quarter in a row, reflecting ballooning imports from both FTA countries and China. Net imports for the quarter saw a massive 1.69% sequentially jump.
Despite the strong inflow of both FTA countries and China, our company reported a healthy performance, reflecting the agility in operation and diversified product basket while maintaining a strong balance sheet. Our production grew by 4% YoY to 1.97 million tons. However, sales for the quarter witnessed a drop of 8% on a YoY basis to 1.85 million tons. The decrease is mainly due to the plant shutdown in the Raigarh facility, while Angul plant witnessed an uptick of 4% in production quarter-on-quarter basis. Net revenue for the quarter stood at INR 11,248 crore, down by 18% on quarter-on-quarter, largely due to reduction in sales volume and softening of steel prices. On the cost front, coking coal prices were down by $35 per ton, and iron ore price down by INR 500 per ton, in line with our guidance given in our Q1 briefing.
Our SMS cost remained flat on account of seasonal impact on techno-economics. Our adjusted EBITDA on a consolidated basis for the quarter was INR 2,124 crore, and EBITDA per ton stood at INR 11,467 per ton, down by 15% on sequential basis. Accordingly, that declined by 36% on quarter-on-quarter basis to INR 860 crore. We expect a reduction of around $20-$25 per ton in coking coal prices in Q3 FY25. We have taken a price hike of $1,000-$2,000 across product in Q3 so far. Demand post-season festive season is good, and prices are holding up. We expect H2 to be better than H1, driven by strong seasonal demand and lower input cost. Our consolidated net debt is INR 12,464 crore at the end of quarter two, which has increased from INR 10,462 crore reported in last quarter.
Increase is driven by payout related to expansion at our Angul project. Net debt to EBITDA is at 1.21 times, which is still below our real band of 1.5 times and continues to be the best among large steel players in India. Our CapEx in quarter stood at INR 2,642 crore. With this, cumulative CapEx spent under the current expansion program is around INR 20,562 crore. Regarding the expansion project at Angul, same is progressing well as per the schedule communicated earlier. We are hoping that we will deliver the project in record time. With this, I will conclude and hand over for Q&A session. Thanks. So now I will hand over to Vishal.
Thank you, sir. Yashaswin, can you please open the line for the Q&A?
Certainly, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. In order to ensure that the management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We will wait for a moment while the question queue assembles. We'll take a first question from the line of Amit Dixit from ICICI Securities. Please go ahead.
Yeah, hi. Good evening, everyone, and thanks for the opportunity, and congratulations for a good performance in a very testing quarter. I have two questions. The first one is related to the DRI second plant, which appears to have been delayed to Q4 FY27 from Q3 FY26, if I look at your presentation. We just wanted to know the reason for the sale, and we wanted to impact your metal capacity and finally the steel capacity.
So Pankaj, just if you can respond.
Yeah, sure. Thank you. Thanks, Amit, for this question. We are working on our strategies to make sure we deliver the volumes as early as possible, so our entire focus is right now in terms of adding volumes that we think the first scale would come from BF or crude. So that's one area where we are actively pursuing our project strategies, and we are very hopeful of delivering the timelines that we've stated, and definitely, we are working on the DRI stream, which would be the next in line.
Not in my question, but since if the DRI is delayed, your availability of metallic would get delayed. So wanted impact over crude steel capacity reaching 15.75 million tons by end of FY26 because it is delayed to Q4 FY27, which is a very significant delay from the earlier Q3 FY26.
Q4 FY27? This is 3Q. Amit, this is actually 3Q FY26 only. It seems there has been some typo over here, and the numbers have a little moved meanwhile over here on the DRI. So DRI is on track for the third quarter of FY26.
I apologize for the goof up over there, but it's 3Q FY26 only and not 4Q FY27.
Okay, so essentially the timeline for [audio distortion], that's [audio distortion] .
Let me reiterate over here. There is absolutely no change in any timeline, and we are on track to deliver what we have promised on the revised timelines. In fact, the Blast 1 is scheduled to get commissioned in Q4 itself, and we are at the advanced stages of the commissioning.
Okay. The second question pertains to the captive coal mines. If you can highlight the quantity of coal that was supplied in this quarter, and what is the ramp-up of the commissioning schedule of the mines?
Okay. Thanks, Amit, again for this question. Our mines ramp-up is as per the plan. We mine close to 1.3 million tons in quarter two from our Utkal C mines, and going forward, we are also in the very, very advanced stage of opening up our Utkal C mines.
Okay. So when can we expect all these mines to get opened, and is there any testing permit that remains at this point in time?
We are very hopeful of starting our Utkal B1 in quarter four of this financial year.
Okay. Okay, sir. That's great. Thank you and all the best.
Thank you. We'll take a next question from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah, thanks for the opportunity. Just following up on the question on the coal mines, I think it was also kind of expected that the EC will be increased for Gare Palma and Utkal C. Any update on that?
This is work in progress, but the main focus right now for us is Utkal B1 startup, where we have received all the approvals, and we are in the process of opening up this mine now.
So Amit, just to add on to what Pankaj has mentioned, we will not be short on coal, so we will not need to buy any coal for the markets. So even if the EC doesn't come as per our scheduled timeline, which we believe it will be there, we will not be short on coal. So we will only be having more surplus coal over there.
Sure, sure. That's very reassuring. And also on the slurry pipeline, I believe it's due in Q4 FY25, so that's also on track, right?
Yeah, Amit, I think this is one of the most exciting projects, and with the change of the guard right now in Odisha, there's a lot of excitement about this project, and we're getting full support in terms of expediting the completion of this project. Good part is we've almost completed 80% of the project as of now when we are talking.
Sure. So also to understand the drive in terms of the cost reduction or margin expansion projects now, I mean, that will be the key project going ahead, right, incrementally speaking?
Yes, this is one of those projects.
Could you just maybe refresh the understanding once? How much is the anticipated cost savings once the slurry pipeline is in place?
So Amit, if you remember in our previous calls, we've mentioned that we would not be in a position to give you an item-wise breakdown on what is the cost saving on slurry pipeline, on HSM, and BF. But again, as we've mentioned there, our entire CapEx program is based on the fact that we would generate a very high ROCE. So I'm sure you would be able to back calculate the kind of total project savings out of there.
Okay. Okay, sure. That's all, and I'll come back in the queue.
Thank you. We'll take our next question from the line of Indrajit Agarwal from CLSA. Please go ahead.
Hi, thanks for the opportunity. A couple of questions. First, a quick question. How are the NSRs this quarter versus last quarter? And how is the spot NSR versus 2Q average?
Yes. So I will just explain. So our steel NSR for the quarter was INR 54,603, as it is last quarter, INR 55,845.
What is the spot?
We have increased prices in the range of INR 1,000-INR 2,000 across the product basket. We are already in the open market. I have already mentioned that.
That's clear and what kind of iron ore inflation can we see in this quarter, in third quarter, broadly as things stand today?
So let me put it this way. When I look at the iron ore prices related to steel prices today, iron ore prices are back to August levels, FY levels, whereas steel prices are still down by almost INR 2,000 from those levels. So if you look at iron ore prices, they need to go down substantially if you have to pick up. They have to be in tandem with the steel prices. Otherwise, we see a spot spread compressing compared to simply putting on the iron ore prices in the past.
Sure. Lastly, help us understand the current HSM run rate. What is the current run rate?
Indrajit Agarwal, I'm sorry, your voice is muffled. Can you use your handset mode, please?
I'm actually on handset. Can you just help us understand what is the current HSM run rate at which it is running currently?
We're running at almost 40% utilization of HSM.
Can you help us understand the progress rate by end of fourth quarter? Can we get to 80% kind of utilization?
We're just waiting for the metallics to come. Once they're there, the ramp-up would be very easy. The good part is we've already seeded the market with our products.
Sure. That's all from my side. Thank you.
It is very easy for us to ramp up the HSM because now it's stabilized completely. But since we are stopped for the metallics, further ramp-up would only be possible after our last one is commissioned.
Sure. Thank you. Thanks.
Thank you. We'll take our next question from the line of Parthiv Jhonsa from Anand Rathi. Please go ahead.
Yeah, hi. Thanks for the opportunity. Congratulations on a good set of numbers. My first question is pertaining to debt. Debt has been consistently increasing over the last couple of quarters. So any guidance on the reduction that side? Because it is continuously increasing over the last few quarters.
So, I will just say, actually, we are expecting that H2 will be better than H1, and we are expecting higher EBITDA from our operations. So, secondly, we are looking at our CapEx plan as well. So, we are restricting ourselves that net debt will not go up too much. So, we are targeting, as we have stipulated, 1.5 times. We will be much below than that.
Any number on the reduction, sir?
Parthiv, just let me add over here. We are right now very close to our peak debt numbers. Okay. Given the fact that the commissioning-related payouts have started happening while the production has yet to come in, so the profitability is not there while the cost has got all embedded over here. So the leverage looks higher compared to our own timelines, as well as the gross level and net level debts are also higher. But from here, I think we are only going to see a reduction in both the leverage absolute terms as well as other issues.
All right. All right. And so my second question is on coal. Any guidance for the Q3? What kind of numbers can we foresee for coal?
Normally, we don't give any guidance on operating parameters, but we are comfortable in terms of driving home through our own mines.
All right. If I may, can I just squeeze in one more small question? It's pertaining to your Australian subsidiary. It's still consistently facing losses. So any color on that side of the business? When are you at?
Right now, Australian business is undertaken under care and maintenance. So we are not burning much gas there. So that's it. So Parthiv, if you look at the overall pool, the difference between standalone and consolidated is largely driven out of not only the overseas subsidiaries, but also from the JSOL of the Odisha expansion. So as the Odisha expansion continues to ramp up, you will see a wider gap between standalone and consolidated. Okay. So the burn rate is not at all at the overseas operations because, as we highlighted in the past also, the overseas projects or subsidiaries are all based on driving their own cash flows and resources and expenditures. There is no movement of cash from the parent to the overseas subsidiary.
So Odisha project is in a ramp-up phase, so obviously, you will see some bit of challenge over there, but that's pretty normal with any project which is on an expansion phase. So I think from next quarter onward, we will see that declining.
Gotcha. Thank you so much. Appreciate it.
Thank you. We'll take our next question from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead.
Thank you, sir, for this opportunity. We mentioned that we are comfortable about the coal availability for the year, and we don't need to purchase the external coal. I believe we are operating our existing syngas plant at around 50% capacity. Would we be able to ramp that up to 100% with the new domestic coal availability, and will that improve the availability of metallics?
That's a very good question. And we are right now working comfortably with 50% utilization of our coal gasification plant. This gas ramp-up is expected to happen with our coal loading complex coming online now. So we are looking at the capacity utilization of coal gasification to go up to around 70% by the end of this financial year. And we are comfortable ramping it up through our own coal itself.
That will not help us support the ramp-up at the HSM. HSM ramp-up will be more linked to the startup of blast furnaces. Is that the right way to think?
Correct. So HSM ramp-up would be more linked to the metallics availability. As of now, the level of metallics that we have in the organization, we have ramped it up. It's not dependent upon coal gasification of the syngas . It would be more on the availability of the metallics at HSM ramp-up.
Right, and second question was on the slurry pipeline. I believe you were facing certain ROE-related issues, which has resulted in sort of delaying commissioning of the slurry pipeline. Could you highlight sort of how much ROE is available at this point of time, and are those issues behind us now?
Yeah, those issues are all behind us as of now, and there's a good harmony along with the new government, and we're fully confident of delivering this project now.
In terms of the pipeline status, welding status, would you be able to indicate some sort of the physical progress on the slurry pipeline as well?
I just indicated that number. Close to 80% of the project has been completed.
Sure, sir. Thanks for this color.
Thank you. We'll take our next question from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead.
Yeah, very unique, sir. So I have a question on our remaining CapEx. So I think our total growth CapEx was about INR 31,000 crore, and we already spent close to INR 20,500 crore. So normally, we do have some performance guarantee-related payouts that are deferred. So is it right to understand that the balance, at least 10%-15% of the balance amount, would probably happen over the next couple of years and not immediately?
Yeah, that's right. So certain retention amount that will be paid over the next two to three years' time after commissioning of the full project.
And what will be the maintenance CapEx, sir? This is a part of the growth CapEx.
Pallav, our maintenance CapEx is close to about INR 600 crores on a quarterly basis.
Okay, so about 2,500 crores on an annual basis.
Yes, you're right.
Yes, sir. Also on the question related to metallics, so we had an arrangement with RINL. So could that be a source for metallics, or are we not really getting too much metallics from there right now?
That's again a wonderful question. We started on a good note with RINL before they had their own set of challenges. What we understand from the current condition is there are two blast furnaces that are down. So they're running short of metallics themselves. So there are good developments over there on that front, and some infusion of money is expected from the Government of India. So we are just waiting for the blast furnaces to be up and running before we start securing some metallics from RINL.
Sure, sir. Lastly, could we just get your thoughts on a few reports of safeguard or anti-dumping duties being imposed? So is there actually truth to this, or is it more speculation that's happening in the media?
Pallav, anti-dumping, we have been through the industry informing the ministry about the kind of imports that have come in the Indian space, both from FTA as well as non-FTA countries through direct and indirect routes. So the ministry has taken cognizance of these imports. And in fact, in one of the conclaves, the chief minister himself has mentioned that he would look at this matter and respond appropriately. So we are quite hopeful that anti-dumping duty or increase in the basic customs duty of any sort should be in the pipeline. But when it will come, how will it come? It's absolutely impossible to make any predictions for that.
Sure. Yeah. Thank you so much.
Thank you. We'll take our next question from the line of Ritesh Shah from Investec. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. So just correct me if I'm wrong. You indicated that the HSM utilization is at 40% right now. We expect it to go to 80%, hopefully by end of the year. You also indicated currently DRI is at 50% utilization. Are those variables correct, sir, to what I heard?
Sorry, I'll just correct the variables. HSM is currently at a utilization rate of close to 40%. As in when the metallics from the new expansion comes in, it would be further ramped up. Right? Second, you spoke about DRI. We never touched upon DRI ramp-up. It was coal gasification plant ramp-up, which is at 50% utilization because this is the amount of gas which is needed right now to keep running our DRI at full capacity. So as in when there are more consumers within the plant, the coal gasification ramp-up will happen on our own coal. I hope that.
Sure. And the [audio distortion] Yeah. Yeah. So thanks for that, sir. So you're indicating CGP is at 50% utilization, the coal gasifier?
Yes. That's what I've said because this is the amount of requirement of the gas in the plant as of now.
Perfect. And sir, can you just brief about.
Can you join back the queue, please, as we have several participants waiting for their turn? Kindly join back the queue.
Sure. Thank you.
Thank you. We'll take our next question from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah. Thanks for the chance. My first question is on the two captive coal blocks. Could Utkal B1 be expecting 4Q commercialization? Is it possible to share? Have we received all the approvals? The mining lease is signed, and it's on the execution on the ground, which is happening now. And also, if you could guide us with respect to Utkal B2 mine.
For Utkal B1, like I mentioned, we have secured all the approvals, and the work on the ground has already started, and we are very confident of starting this mines in quarter four of FY25, and Utkal B2, we are on the ground in terms of securing the approvals. We are also hopeful it will follow its own natural course, and we should start this mines in the next financial year.
Okay. My second question is on the.
Sorry, just to clarify, when Pankaj mentioned on the ground, doesn't mean we are in the mine. It means the activities are at the full speed.
Sorry, I missed the last word, Vishal. What did you say? Activities, right?
The activities are going at the full speed, as in we are very close to getting opening the mines. But when he said on the ground, doesn't mean that we have opened the mine. We are in the mines.
Got it. Got it. I have one clarification on the subsidiary EBITDA, which is around INR 180 crore. Is it possible to share what is coming from international business as a whole called the few geographies and Odisha subsidiary?
One to one and I will request IR team. He will get back to you for the details.
Okay. And just one last clarification on the first half: is it possible to share what is a mix for thermal coal? How much is captive? How much is vintage? And how much is the auction?
The auction, we have completely stopped buying, and majority of the coal is now from our own mines. We have a very limited amount of FSA coal, which we have to take up. That is on account of our tapering linkage. Other than that, everything is in-house.
Got it. Thanks. Thanks a lot, Vishal.
Want the numbers? We can discuss it offline.
Sure, Vishal. Thank you.
Thank you. We'll take our next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Hi. Thank you. This first question I wanted to ask on the power strategy. Recently, you signed an agreement with SECI for a supply of three gigawatt of renewable...
[crosstalk] Sorry, Your audio was not very clear.
Can you hear me now?
Yeah. Are you on your handset because your voice was muffled?
I'm not on my handset.
Can you use your handset, please?
Is it better now?
Yes. Please go ahead.
Just wanted to ask on the power strategy. The group signed an agreement with Jindal Renewable for three gigawatt of RE. You also have 1,600 megawatt of CPP yourself, another 1,000 megawatt coming out. So how are you looking at the sourcing of power and all the capacities you have? That's the first question.
Satyadeep, as the clamor for the green steel continues, we have signed an MOU with the group, as you mentioned, to set up for green power in the long term, part of which will come in very soon, and part would be thereafter. Now, how do we look at the rest of the power strategy? I think one of the key points here is that thermal power is here to stay, but steel would be produced more and more from the green power that would be procuring. We will have a mix of both renewable as well as non-renewable power. In the intervening period, when we have surplus, we would look at opportunities to sell it to the grid.
Okay. Thanks for that. Secondly, just on the capital allocation, as you look beyond Angul 2, do we assume that till Angul 2 commissions, you would not look at further expansion? How do we look at growth beyond Angul 2, organic, inorganic? When do we see that? Some thoughts on long and flat. Is it too early to think about that?
Satyadeep, we will definitely not be stopping at Angul 2. Okay? We have one of the best balance sheets in the industry. Angul 2 is going to throw a lot of cash, one of its stabilizers. This will be reutilized and reinvested in further expansion. But what would be the nature of expansion and the product profile, that's something we've not yet finalized. We will get back to you at an appropriate time when we feel we are ready for the next phase of expansion. But at this point in time, it would suffice that we will not stop here. The cash flows would be strong enough to fuel the next leg of growth, so we'll continue to grow. Angul, as you mentioned in the past, also has a capacity to house about 27 million tons.
So our vision is to make Angul the largest single-site steel plant in the world and even work towards that.
Okay. Thank you so much. I wish you the best.
Thank you. We'll take our next question from the line of Raashi Chopra from Citigroup. Please go ahead.
Thank you. Just to clarify on some bookkeeping questions. You had mentioned the realization this quarter was 54,600, and 55,800 was in the last year or the last quarter?
Yes. Yes. I have mentioned it's still a flat product. So this is basically the benchmark numbers. Okay? But obviously, our numbers would be different from these numbers. So these were basically the benchmark HR realization numbers.
For 2Q and 1Q?
Right.
For yourselves, what has been the change in the realization sequentially?
Can you please repeat the question?
For yourselves, what has been the change in realization sequentially? Because if I just divide by the revenue by volume, it appears that the realization has moved up sequentially.
You're looking at standalone numbers, right?
Standalone, yes.
So on the standalone numbers, if you look at the volume, you would have divided the consolidated volumes. Yes. So if you divide by standalone, it's coming at around 61,695, down by 3% from the last quarter.
Okay. And the cost is. Sorry. You say?
So you have to divide it by last. Standalone sales volume is 2.03 in the Q1. And in the Q2, the volume is 1.87 million. So I think, Raashi, if you divide by, if you divide by numbers, you will get the number. Yes. So there is a decline in the standalone ASP as well.
Okay. So the decline is 3% on a sequential basis, standalone?
Yes. Yes. Yes.
Okay. And on the cost side, it's flattish on a sequential basis?
Yes.
Okay. So the decline in the coking coal as well as the iron ore has been offset by other expenses and lower volumes?
Yes.
Right. And just on this cost side, coking coal should be down by about $20-$25 more in the third quarter?
That's right.
Iron ore?
Iron ore, we are right now; there is a slight increase by NMDC and OMC to the tune of INR 500-INR 1,000 per ton. So that is there. Raashi, as I mentioned in the answer, while steel prices have been continuously coming up, iron ore prices have recently seen a sharp spike. So as a result of which, these cost spreads are actually trending down compared to the Q2 numbers. So either these steel prices have to move up to realign the spreads, or iron ore prices should come down because this is an artificially inflated iron ore price at this point in time.
Understood. And just one last question.
[audio inaudible] to join back the queue, please?
Okay. No problem.
Thank you. We'll take our next question from the line of Vikash Singh from Phillip Capital. Please go ahead.
Good evening, sir. Thank you for the opportunity. Sir, if I just look at the standalone minus the consolidated, there is INR 210 crore. Just wanted to understand which subsidiary is contributing that much of money because this number is pretty fluctuating on a quarter every quarter.
So basically, this is JSOL, and there is 100% subsidiary that we have commissioned. EBITDA is coming from the start of the operation.
How should we look at this number going forward?
It will improve once the operation of our JSOL streamlines, and as we have said, the utilization will go up. Certainly, the volume will go up, and the EBITDA will come up from that JSOL product. Because as soon as we commission our blast furnace, that is where you see a sharp spurt in the profitability of the Angul expansion.
Understood. My second question pertaining to HSM. You said that it has reached 40% of utilization level, and further ramp-up is not possible unless the new coal mines come in. So in terms of the benefit from the low-grade semis to the finished steel, that benefit we have received so far, and if you could quantify that once the coal mines come, how much more benefit could be arrived from the HSM itself?
We are not selling. So we are not selling any semis right now. So whatever steel that we have, we are finishing that in the HSM, and we are selling the value-added products. So we are not selling any semis right now.
And the operating leverage benefit once that, yeah, sorry, please continue.
Because the benefit of conversion of semis to HSM has already been realized. Okay? And now incremental benefit of volume will come through once the coal mines get commissioned. So at this juncture, we hardly have any semis to sell in the market.
Understood. Understood. That's all from my side. Thank you.
Thank you. We'll take our next question from the line of Ashish Kejriwal from Nuvama Wealth Management. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Good evening, everyone. So three quick questions. One, in coal mines, last quarter, we said that we are on the verge of expanding the existing EC limit of Utkal C and Gare Palma, where we are on that. And second question is, have you said that we are running at a peak capacity utilization for our DRI plant at Angul? If that's the case, what is the overall capacity utilization at Angul in Q2? And third is, in terms of sales volume, last quarter also mentioned that we will be selling more than two million tonnes each quarter. And this quarter, though, volumes have been down on production because of the shutdown. But sales volume was lower than the production volume also.
So are we getting any hit because of the logistics or some slowdown in demand, or what could be the thing which can explain that? Thank you.
So for Ashish, just there are a number of questions. If I was to take one after another, DRI capacity utilization is almost at the full level in the plant as it now.
Can you repeat that, sir? We couldn't hear your last sentence. Can you please repeat?
Okay. DRI utilization continues to be at the full level in the company. So there were some shutdowns, which are planned shutdowns. That's the only differentiation that we have in capacity utilization. Second, you mentioned about the EC increases about Utkal C and Gare Palma. That's the work in progress. We are working very closely in terms of securing the approvals. And we are very hopeful very soon we should get those approvals also in place. The third question, maybe I missed. If you can repeat your third question.
My question was, at what capacity utilization we are working with in Angul overall, 6 million tonnes, and sales volume in second quarter, why it is lower than the production volume also?
Overall, Angul capacity sweating in quarter two being close to 85%.
Is this the maximum which we can do, or we can elevate it without any further addition in our plant?
We have seen 4% increase in terms of Angul utilization sequential basis, and we are looking into further improving the capacity utilization.
Okay. And about the sales volume?
The sales volume, what you mentioned, yes, we are mindful of those volumes. Of course, there were some plant shutdowns in Raigarh, which led to some drop in terms of the production as well as the finished volume. While we talk about the steel capacity, which is typically the crude steel, the finished good would be slightly lower than that. That's what is the numbers getting reflected in the numbers.
You don't have much inventory, or inventory level has not increased?
It's more or less stable levels. Very marginal change in terms of sequential basis, in terms of inventories.
Okay. So, is it possible for us to give a sales volume guidance for FY25?
I'm sorry. I don't think we are in a place where we normally give guidances for the forward. But the company remains committed to increase the capacity utilizations and deliver quality products to the customers.
Okay. Thank you, and all the best.
Thank you. We'll take our next question from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Hi. Thank you for taking my question. I have just one question. Just trying to understand what has driven iron ore price hikes to the level where you say they are unsustainable? Maybe alternatively, what should drive them down, assuming global iron ore prices stay where they are? Just trying to understand if there is any structural issue with iron ore prices over here? Thank you.
So around the global iron ore scenario today, the way we perceive it, iron ore is getting more and more classified as an oligopoly, given that between NMDC and OMC, there's a massive supply pool. However, steel continues to remain fairly diversified among several players. So there is a demand-supply mismatch which is apparently there. Okay. Secondly, the recent push by China, the stimulus given by China, has led to an increase in global steel prices as well as iron ore prices. However, the steel prices have corrected for that, but iron ore has yet to be corrected. So we believe as steel prices have corrected marginally, iron ore prices should also fall in line.
Got it. Thank you. Just one bookkeeping question. What was the share of exports during the quarter?
It was 9%.
It was 7% last quarter, right?
Yes.
Thank you so much.
Thank you. We'll take our next question from the line of Ritesh Shah from Investec. Please go ahead. Mr. Shah, kindly unmute your connection. There is no response from this connection. Ladies and gentlemen, to ask a question, please press star and one on your phone. We have a follow-up question from the line of Parthiv Jhonsa from Anand Rathi. Please go ahead.
Yeah. Just a very quick question. What can be the tentative coking coal cost saving? Did I hear correct? It is about $20-$25 in Q3?
That's right. That we have.
Is it possible to give any guidance for FY25 volumes by any chance?
No. Right now, we'll not be in position to give your forward-looking segment.
Sure. Thank you so much.
Thank you. We'll take our next question from the line of Ritesh Shah from Investec. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Quick one. Sir, would it be possible for you to quantify how much was the external metallics purchase in first half? And is it a strategic decision not to purchase incremental metallics and wait for the furnace to come upstream?
Oh, that's a good question. We keep adjusting our strategies every quarter based on the demand of our products and in the industry. So that's how we devise our strategies on a quarterly basis. And going forward, if there are opportunities existing, we would be open to this also, provided it makes commercial sense.
Sure. And just quick two questions. Any update on railway logistics as we look to ramp up the capacities? How are we looking at outbound logistics? And specifically, if there's any update on Paradip Port, that's the first question. And second, any update on ACPP 1 and 2? And we had plans to dismantle the older 1350 megawatt. Where are we on that? Thank you so much.
On railway logistic projects, the project, while we are trying to drive in terms of doubling the rail lines to the Angul station, that's fully on track, and by the end of this financial year, we are hopeful of completing that connectivity. We are also working internally in terms of connecting the various new units and facilities to the holding yard. Holding yard expansion is about to get completed now, so we see that project going as per the schedules that we have guided. Second, in terms of your question in terms of where are we in terms of ACPP 1 and ACPP 2? ACPP 2 right now, technically, is all ready. We are waiting for the approvals to come up. We're very hopeful of starting ACPP 2 sometime in quarter four to start itself.
In terms of ACPP 1, which we just spoke about, once we stabilize ACPP 2 unit 1, hence, we will start looking into the revamping of our ACPP 1 turbines also.
So Ritesh, just to add to it, there are absolutely no plans to dismantle any of the existing facilities just because a new facility has come up. We will have surplus power, as I mentioned earlier. We will be selling surplus power in the market.
Sure. Thank you so much.
Thank you. We'll take our next question from the line of Pratim Roy from B&K Securities. Please go ahead.
Yeah, sir. Thank you for the opportunity. Just want to clarify that you have mentioned in the earlier comment that this quarter, we are expecting INR 1,000-INR 2,000 price hike. So if you quantify the number, how much extra delta in terms of NSR we can expect in 3Q over 2Q? If you can give some number on that?
I could not get your question right now. If you can repeat that?
So my question is that how much NSR improvement we can expect company level for 3Q over 2Q?
So, Sunil, can I? Number one, this is a forward-looking question. The company keeps revising its strategy on quarter-to-quarter basis in terms of the product portfolio itself. We keep tweaking the product portfolio to make sure that we are able to maximize our value-added NSRs given the current scenarios that we are into. We also keep looking into the value addition that we bring in onto the table with respect to each and every product category also. That's what we keep tweaking to maximize our blended NSRs.
As I have already mentioned, our NSR will go up by INR 1,000-INR 2,000. That I have already spoken in opening remarks. That is still now. We are seeing further rise incoming due to after Diwali is over. We are seeing that the rebound in demand in steel prices.
We are expecting further prices will go up from here.
Okay, sir. Thank you for the detailed answer, sir. Thank you. And best wishes for the upcoming quarter.
Thank you. Next question is from the line of Pavas from Birla Mutual Fund. Please go ahead.
Hi, sir. Just wanted to understand. I know it's very difficult to guide for FY25 numbers. From a broader perspective, is FY27 will be a kind of full ramp-up, or FY28 will be a full ramp-up?
So we are looking at FY27 to be the full ramp-up.
Okay. Sure. Secondly, we were supposed to kind of balance our finished versus crude steel. There's still scope for 1.5 to 2 million tonne of kind of finished steel capacity to come up. Have we finalized on that?
Pavas, you have rightly mentioned there is seemingly a gap. And as we have mentioned, there is a Plate Mill which is yet to come up over there. So part of that gap could be bridged over there. And we will look at adding a few other finishing lines as and when we feel it's appropriate to fill in the gap. The idea is to maximize contribution as well as the delta. So we will make sure the semis are brought down to the minimum going forward as well.
Sure. This full ramp-up, what does this translate to in terms of finished steel kind of production?
That would be looking for a guidance, Pavas.
Sure. Okay. Thank you.
FY27 is a full year of full ramp-up.
Okay.
Pavas, are you through with your question?
Yes. Thanks.
Thank you. We'll take our next question from the line of Pawan from LKP Securities. Please go ahead.
Hello.
Yes.
I'm audible?
Go ahead. Yes.
Thanks for the opportunity. My short question was that what was the share of value-added products on the sales volume of 1.85 million tonne?
It's almost 50%.
50%. Okay. Thank you, sir.
Thank you. We'll take our next question from the line of Prateek Singh from DAM Capital. Please go ahead.
Okay. Hi. Thanks for the opportunity. Just wanted to clarify. When Sir said that there is a price hike of INR 1,200, that is post the quarter end, or are we calling for this much higher ASP versus the 2Q average?
We are saying the 2Q [audio distortion] Q3. So we are mentioning about the average price from the Q2 to till now, increasing October month.
Understood, sir. So if you don't take any further price hikes, the 3Q would largely be INR 1,000-INR 2,000 per tonne higher than 2Q. That would be the kind of understanding. Okay. Thanks. That's it from my side.
Thank you. As there are no further questions, I would now like to hand the conference over to management team for closing comments. Over to you.
Sir, request Pankaj Sir to give a closing remark on this, sir.
This quarter, your company has delivered strong numbers despite some headwinds. We have gained confidence as a management team of delivering another wonderful quarter in quarter three. And that's what we look forward to this. And we remain thankful to your questions and queries. And we'll be in touch offline if needed to be, which I can take your question. Thank you.
Thank you. On behalf of JSPL and Nomura, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.