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The stainless steel sector is expected to grow at 8 – 9 per cent for FY25 with strong domestic demand following an increased thrust on infra, including by the Railways and from Metro projects. But, rising imports from China and Vietnam are a “pain point,” says Abhyuday Jindal, Managing Director, Jindal Stainless Ltd.
According to him, export markets like the US and EU continue to be depressed primarily because high freight rates adversely impact numbers and geopolitical tensions.
In an interview with the businessline, Jindal talks about the domestic and export market outlook; the impact of CBAM, and the company’s preparedness, including reducing carbon footprints; and securing raw material overseas.
Excerpts:
What is the domestic market outlook?
We have expected an 8-9 per cent growth for the stainless steel industry for some time now, driven by the ongoing infrastructure push across the country.
Metro projects will also see stable growth, with many already underway. Indian Railways’ key projects, such as Vande Bharat sleeper trains and Vande Metro, are also transitioning towards premium grades. The government has decided to make all Bullet Trains in stainless steel, and its sourcing will be done from Indian coach-makers, which is a huge push.
The Centre’s outlay of ₹11,11,111 crore in infrastructure projects is expected to create significant new demand (for stainless steel). We also foresee demand in the manufacturing and processing industries picking up.
A problem continues to be rising imports of steel & stainless steel). What are your comments?
This is a major pain point. China and now Vietnam are major exporters to India. Shipments coming from Vietnam have increased by nearly 75 per cent in H1FY25 y-o-y, negatively impacting MSMEs. We are in continuous dialogue with the Government to advocate the imposition of duties on Chinese imports. Trade practices there have often included dumping of substandard and subsidised stainless steel.
Export markets have been under stress for over a year. Is there a particular reason?
Exports are a strategic priority for us. Due to geopolitical factors, our largest export markets—the USA and EU—have not recovered as expected. Our Q2 exports were also impacted by elevated shipping costs, with ocean freight rates still hovering at 4-5x original costs. However, we were able to maintain exports at 10 per cent (of sales) by targeting other geographies such as South America, South Korea, and Japan.
How has the ME played out as a new export destination?
The Middle East’s proximity to our operations has helped shield the increasing freight caused by the ongoing war. In fact, owing to the Comprehensive Economic Partnership Agreement and other favourable factors, we have maintained and even increased our shipment volumes to the region.
Has the rollout of CBAM impacted exports, especially in the EU?
Currently, CBAM has not had a significant impact on the EU market. However, we still need to obtain many details from the EU. It will be important to take a wait-and-watch approach to understand how CBAM will unfold practically in the future.
Are you aligned with CBAM requirements?
We have developed action plans aligned with CBAM requirements and have communicated our preparedness to relevant stakeholders to ensure transparency.
Jindal Stainless has initiated reporting procedures and collaborated with accreditation agencies. We have also implemented a data management system that allows us to efficiently collect emissions (data), production processes, and energy consumption across the entire production and supply chain.
To ensure comprehensive (CBAM) compliance, we have engaged with a consulting partner to help us navigate the requirements.
Our EU clients have received quarterly CBAM reporting templates, including for the September quarter. Additionally, we are exploring integration with SAP to streamline our emissions calculations.
You also need to reduce carbon footprints at the production or factory levels. How is that being done?
We have a Net Zero target of 2050. Over the last three fiscal years, we have reduced over 3 lakh tonnes of CO2.
Jindal Stainless commissioned a pilot Green Hydrogen Plant at the Hisar unit. The Phase 1 (90 NM 3 /Hr) of this plant, with a generation capacity of 90 NM3/hr, will enable us to reduce our CO2 emissions by nearly 2,700 metric tonnes per annum (mtpa).
Our project with ReNew Power is also near completion, and renewable energy sourcing commenced in September 2024.
We are currently looking at options for a Green Hydrogen Plant at the Jajpur unit.
How are you securing raw materials, specially in the absence of nickle in India?
In March 2023, Jindal Stainless acquired a nickel pig iron smelter in Indonesia, commissioned in August 2024. Commissioning was achieved eight months ahead of schedule. The facility, developed through a JV with New Yaking Pte, ensures the supply of nickel, a key raw material unavailable in India. Without domestic nickel sources, this strengthens our ability to meet our raw material needs, especially when the market is often impacted by (nickel) price volatility.
As part of the ₹5,400 crore strategic investment, Jindal Stainless entered into an agreement with a Singapore entity to set up a stainless steel melt shop in Indonesia, with a capacity of 1.2 mtpa. Indonesia is among the best alternative options for securing the availability of raw materials.
Additional opportunities for securing essential raw materials are being explored, too. We also look forward to government support in accessing minerals not available in India.
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