NEW DELHI: President Donald Trump lauded India as a nation with expansive investments in the US at the Howdy Modi event, specifically mentioning JSW Steel’s plans in the US, but the Indian steel giant has a strikingly different tale to tell.
Trump said India had been pumping money into the US steel industry, referring to JSW Steel’s proposed USD 1 billion expansion plan in phases that it had announced in 2018.
Fast-forward to 2019, the steelmaker has sued the US government for not being exempted from import duties on raw materials for its US facilities.
The company has also slashed its capital expenditure plans in the US by 60 per cent to USD 400 million owing to delays in getting US regulatory approvals and partly due to weak local demand amid a slowing economy.
An official from JSW claimed that the US government’s commerce department was authorised to grant exclusions from tariffs to US businesses that rely on certain types of steel that aren’t produced in the country in sufficient quantities.
However, the department has denied waivers for steel slab raw materials, forcing the company to pay tens of millions of dollars in tariffs, he said.
Notably, the steelmaker relies on imports of these materials from India and Mexico because the US doesn’t produce steel slabs of sufficient quality or quantity. JSW Steel makes carbon steel plates and pipes at its Baytown facilities and hot-rolled coils at its Ohio factory.
It has about 1.2 million tonnes per annum of installed capacity for plates and 3 MTPA capacity for hot-rolled coils.
Initially, the company said it would invest USD 500 million to modernise its Ohio facility, which it acquired as part of deal with Acero. Another USD 500 million capex was planned to modernise its Texas facility.
However, the company has invested USD 250 million in restarting production at Mingo Junction in Ohio in the first phase but “has put off the investment plan that was due for the second phase, said a company official.
The company has put off construction of a new electric arc furnace with an investment of USD 350 million at its plate mill in Baytown, Texas.