India's second largest private steel producer JSW Steel today said it has put on hold the expansion plans of its US-based pipes and plates manufacturing plant due to fall in demand of the products.
"We will not undertake expansion of our (Texas) unit at the moment. Oil companies have put their projects on hold... So the demand for our pipes has fallen," JSW Steel Vice-Chairman and Managing Director Sajjan Jindal told PTI on the sidelines of an International Coal Conference organised by industry body Assocham.
However, he maintained that the company would review the expansion plan when the demand improves.
Pipes made at JSW Steel's Texas plant is mainly consumed for transporting oil.
The plant manufactures about a million tonnes of plates and half-a-million tonnes of pipes. The company had plans to increase the capacity of pipes by another half-a-million.
"We are not increasing the capacity of the pipe-making facility at the Texas mill to match that our plates," JSW Group CFO Seshagiri Rao said.
Oil prices have plummeted by more than two-third since its peak of about $150 per barrel earlier this year. Due to the global economic slowdown almost all the companies pan sectors have resorted to cost cutting to match the slackening demand trend.
Steel prices have halved from the peak $1,250 a tonne earlier this year to about $600 a tonne. Commodity prices have plunged by more than 60 per cent.
JSW Steel (USA), a division of the Indian unit, had bought the Texas-based plate and pipes mill last year from Jindal United Steel, SAW pipes USA and Jindal Enterprises.
