Steel giant JSW invests US$1bil into US and more will follow

MUMBAI: India’s top steelmaker JSW Steel Ltd says it is scouting for more deals in the US and Europe to expand its global footprint, betting that vibrant growth will underpin demand in overseas markets and complement a boom at home that’s seen the mill ramp up local output.

“What is driving us is that, inherently, we find it is an interesting opportunity because the US economy is doing well” and the investment cycle looked positive, joint managing director Seshagiri Rao said in an interview.

After meeting half its target for 10 million tonnes of capacity overseas, the steelmaker is now looking to buy more facilities, Rao said.

While the global industry has been roiled this year by tariffs imposed by US President Donald Trump on some flows of steel into the world’s top economy, mills are still enjoying benign conditions.

Worldwide production hit a record in May as capacity utilisation climbed, according to the World Steel Association.

Against that backdrop, Mumbaibased JSW has been busy: after announcing a move to triple output at its Texas plant, it snapped up another US facility in Ohio, taking total planned investment in the country to US$1bil.

For Rao, the commercial lure isn’t dependent on the trade moves, which he said are transitory. “The US economy – notwithstanding the trade remedial measures which the US government has taken – is quite buoyant, demand is picking up,” he said. “It is not because tariffs were introduced in the US or somewhere else, that is why we wanted to invest.”

JSW Steel shares have soared more than 60% over the past year, aided by record output and profit. To meet local demand, the company plans a US $6bil capacity expansion in India.