JSW S.A.

Earnings Release • Oct 13, 2022

JSW Group's operating activity in Q3 2022

In Q3 2022, total coal production in the JSW Group was 3.43 million tons and coke production was 0.78 million tons.

Its operating results are depicted in the table below:

Production ratios	Unit	Period
		Q3 2021	Q2 2022	Q3 2022
Coal segment
(a+b) Total coal production:	mi llio n t on s	3.34	3.40	3.43
a) Coking coal production		2.71	2.72	2.64
b) Steam coal production		0.63	0.68	0.79
(a+b) Total coal sales:		3.54	3.58	3.49
a) Coking coal sales		2.77	2.78	2.65
including internal sales		1.11	1.19	1.07
b) Steam coal sales		0.77	0.80	0.84
Coke segment
Total coke production	mi to llio ns n	0.92	0.89	0.78
Sales of coke		0.85	0.83	0.70

Coal and coke production in the JSW Group

The operating results of the coal segment in Q3 2022 were as follows:

• total coal production was 3.43 million tons, up by approx. 0.9% compared to Q2 2022 and up by approx. 2.8% compared to Q3 2021;
• coking coal production was 2.64 million tons, down by approx. 3.2% compared to Q2 2022 and down by approx. 2.7% compared to Q3 2021;
• steam coal production was roughly 0.79 million tons, up by approx. 17.0% compared to Q2 2022 and up by approx. 26.7% compared to Q3 2021;
• total coal sales was approx. 3.49 million tons, down by approx. 2.4% compared to Q2 2022 and down by approx. 1.4% compared to Q3 2021;
• total coking coal sales were approx. 2.65 million tons, down by approx. 4.5% compared to Q2 2022 and down by approx. 4.3% compared to Q3 2021;

of which: internal sales was approx. 1.07 million tons, down by approx. 9.8% compared to Q2 2022 and down by approx. 3.0% compared to Q3 2021;

• total steam coal sales were approx. 0.84 million tons, up by approx. 4.8% compared to Q2 2022 and up by approx. 9.1% compared to Q3 2021;
• coal sales to external customers in Q3 2022 accounted for approx. 69% of the total volume.

The operating results of the coke segment in Q3 2022 were as follows:

• total coke production in Q3 2022 was 0.78 million tons, down by approx. 11.9% compared to Q2 2022 and down by approx. 15.5% compared to Q3 2021;
• total coke sales in Q3 2022 were 0.70 million tons, down by approx. 15.8% compared to Q2 2022 and down by approx. 17.8% compared to Q3 2021.

Market conditions in Q3 2022

• Coal segment¹
  • o the average quotation of The Steel Index (TSI) in April–August 2022, affecting JSW's prices in Q3 2022, was USD 362 per ton. Compared to the average TSI value in January– May 2022 affecting the prices in Q2 2022, it increased by 26%,
  • o the estimated average PLN-per-ton price of coking coal sold by JSW to external buyers in Q3 2022 versus the previous quarter dropped by approx. 19%. Converted into USD at the National Bank of Poland's average exchange rate in the pertinent quarter, the decrease was approx. 25%,
  • o the ratio of the average price of JSW's coking coal sold to external buyers to the average TSI for April–August 2022 was 92%. Compared to the previous quarter, it increased by 1 percentage point,
  • o as at the date of preparation of this Report, the values of the Polish Steam Coal Market Index (PSCMI1) have been published for July 2022, but are not representative for the whole Q3 2022,
  • o the average price of steam coal sold by JSW in Q3 2022 in relation to the previous quarter increased by approx. 93%.

• Coke segment²

• o the prices of blast furnace coke in the European market in Q2 2022 was USD 663 per ton, up by approx. 4% compared to Q1 2022,

• o the average PLN-per-ton total contract price of coke sold by the JSW Group in Q3 2022 increased by approx. 11% compared to Q2 2022. After conversion into USD at the National Bank of Poland's average exchange rate from the respective quarter, the decline was approx. 17%.

Data source: Platts, Coke & Anthracite Market Report, polskirynekwegla.pl

• the Q-1 method – quarterly benchmark prices calculated on the basis of the average prices in the previous quarter;

¹ JSW sets prices with its customers on the basis of benchmark prices based on the daily prices of Australian premium hard coking coal grades, in most cases by calculating their mean values by using two methods:

^- the Nippon Steel method – a quarterly benchmark price calculated as the average of the first two months of the current quarter and the last month of the previous quarter,

the above means that the average price of coking coal in a given quarter is influenced by prices over five months (from the previous quarter and the first two months of the current quarter)

² Coke prices are set at the turn of each quarter to reflect the market terms in negotiations. The optimal approach is to compare the prices obtained in a given quarter with the average price in the previous quarter.