(Reuters) – India’s JSW Steel Ltd on Wednesday posted quarterly net profit below estimates, dented by weakness in steel prices, but said exports are likely to improve in the next quarter.

FILE PHOTO: The logo of JSW is seen on the company’s headquarters in Mumbai, February 11, 2016. REUTERS/Danish Siddiqui/File Photo

Exports plunged 70 percent, resulting in total saleable steel sales for the third quarter to drop 10 percent to 3.62 million tonnes, the company said.

However, JSW said local demand for steel remained firm, with domestic sales jumping 15 percent from a year ago.

Escalating trade tensions between Washington and Beijing are a threat to exports, the steelmaker said, adding that the United States, one of India’s key markets, imposed additional duties last year on steel from some Asian countries, including India.

Steel producers in India were hit by a double whammy of a rise in cheap imports and low domestic steel prices, which threatened to wipe out healthy profit they had clocked in the past few years.

Steel prices fell by an average of more than 10 percent in India between October and December, according to government data.

Net profit came in at 16.24 billion rupees ($226.8 million), for the three months ended Dec. 31, compared with 17.53 billion rupees a year earlier, the company said.

Analysts on average were expecting the Mumbai-headquartered company to report a profit of 17.40 billion rupees, according to Refinitiv data.

Total revenue for the quarter from all JSW operations jumped 11.2 percent to 203.18 billion rupees from the previous year.

JSW Steel shares closed 2.1 percent firmer, while the Mumbai market NSE Nifty was up 1.17 percent.

($1 = 71.6200 Indian rupees)

Reporting by Chandini Monnappa in Bengaluru and Promit Mukherjee in Mumbai, Editing by Sherry Jacob-Phillips and Gopakumar Warrier


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