Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

India’s stainless-steel industry could benefit from the gap created by expected curbs on Chinese exporters, according to Jindal Stainless Hissar (JHSL). Subsidised Chinese steel exports which could be hindered due to tariffs and alienation of Chinese products.


For Q1, JHSL has set its focus on export orders and the early signs of economic recovery were seen since May, according to the company. India’s Atmanirbhar Bharat program and the economic recovery package is expected to boost business sentiment in the country. Plans like the National Infrastructure Pipelines and equipment and infrastructure development in the health and medical industry will be beneficial for the domestic stainless-steel industry.


Import intensity remained high during Q4, amounting to nearly 30pc of the entire market share, forcing domestic industries to operate at reduced capacities. The recent government announcements are in favour of domestic industries and will help mitigate the excessive pressure exerted by subsidized and irrational imports.


The Indian stainless-steel segment continued to reel under the impact of imports from FTA countries. Stainless steel imports from Indonesia climbed to 260,881mt in FY20 from 75,187mt in FY19, leading to a steep climb in channel inventories, which impacted margins of domestic players, said JSHL.


JHSL sold 149,000mt of stainless steel in Q4 (Jan-March) from 172,000mt sold in the prior year quarter, a fall of 13pc. Compared to prior quarter Q3, sales slipped by 5pc from 156,000mt. Annual sales volumes for FY2020 stood at 600,000mt, down by 10pc from 667,000mt recorded in the previous year. In Q4, 11pc of total sales were exports, while for the full year export were 10pc.


The revenues from sales slipped by 14pc to Rs20.3bn ($260mn) in Q4 on account of subdued demand owing to COVID-19. The company’s Q4 operating performance was down 20pc to Rs1.74bn from the prior year as raw material prices negatively impacted inventory valuations. Net profit, however, rose by 43pc in Q4 from the prior year to Rs940mn.


Demand from auto and utensils segment was hurt during FY2020 with global slowdown and trade wars causing sales volume to fall by 10pc to 600,000mt. Net revenues in FY2020 fell by 7pc to Rs83.4bn.



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