JSW reduces sales, sees no virus impact yet

Jastrzebska Spolka Weglowa (JSW) is yet to feel any direct impact from Covid-19 on its coal or coke trade. The group’s coking plants are not affected by global logistical problems since they mainly use captive coking coal, the Polish miner says.

JSW’s external coking coal sales fell -3% on-year in 2019 to 5.8 million tonnes, although production was down only -1% to 10.2mt. Performance was impacted by the difficult situation in the coke and steel markets, which resulted in lower demand for coking coal. Unit mining cash cost, however, rose 8% to PLN 426/tonne ($100).

Premium hard coking coal fob Australia prices came down from above $200/t at the start of 2019 to below $140/t at the end of the year. Prices declined in the second half of the year due to curtailed coking coal purchases by China, lower-than-expected demand from India and reduced steel production in Europe.

Coke sales slumped -17% last year to 2.9mt, with output down -11% to 3.2mt, meaning capacity utilisation fell to 86.5% from 93.4% in 2018. Unit cash conversion cost rose 19% to PLN 161.7/t. JSW’s coke sales price fell -2% from 2018 to PLN 1,073/t fca.

“Without a doubt, 2019 was a year of global economic slowdown,” JSW chief executive Wlodzimierz Herezniak says in a note seen by Kallanish. “The crisis in the automotive industry, reduced demand for steel in Europe, and tariff war between the US and China contributed to the drop in international trading activity. Our current activities are therefore focused on intensifying sales and implementing measures to gradually increase operational and cost efficiency.”

JSW’s consolidated revenue fell -11.6% on-year in 2019 to PLN 8.67 billion ($2.03 billion), while net profit slumped -63% to PLN 649.6 million. Poland accounted for 52% of revenue, Austria for 15%, Czech Republic 10%, India 8% and Algeria 5%.

In late November last year JSW signed a PLN 1.7 billion deal to supply Liberty Galati with blast furnace coke for five years until end-2024.