Early Trade Sees JSW Steel Shares Rising Over 3%

Shares of JSW Steel climbed as much as 3.58% at 10:17 am to ₹1,171.40 in Friday’s early trade session. This despite its unit flagging risks of production disruption due to fuel shortages linked to the ongoing geopolitical tensions.

Note that JSW Steel shares have fallen by more than 3% over the past week. It is down over 8% in the past one month. However, the stock has gained more than 9% in the past one year.

Government Intervention Sought By JSW Steel Coated Products

It must be noted that JSW Steel Coated Products, the steel major’s unit, has sought government intervention to secure supplies of liquefied natural gas (LNG) and propane. The company warned that the current shortage could affect operations if supplies are not restored in time.

The shortage has been triggered by the ongoing conflict in the Middle East. The situation has put pressure on global energy supplies and disrupted fuel availability for industrial users.

Timing Matters

The development comes at a time when energy availability has become uncertain due to geopolitical tensions. The move by JSW Steel to reach out to the government shows that the concern is immediate. The rise in the stock suggests investors are factoring in the possible impact on production timelines as well as input costs.

Also Read - Will America’s Credit Stress Spill Over To India’s Markets?

Dependence On Imported Gas

India meets a large part of its gas needs through imports. Consumption averaged about 190 million metric standard cubic metres per day (mmscmd) between April and October last year, according to available data. A sizable portion of this came from overseas supplies.

Sources

The Economic Times

Business Standard