India’s major stainless steel producer Jindal Stainless reported a strong March quarter on the back of solid domestic demand which boosted sales volumes and revenues.
The suspension of Countervailing duty (CVD) on certain stainless steel products has led to subsidized Chinese imports and significant Chinese investment in Indonesia to boost production. This will hurt the Indian market, especially small scale enterprises, noted the JSL in its quarterly report.
Raw material prices increased in March quarter, globally, so did, scrap prices, nickel, copper and ferro copper prices compared to the previous quarter. The rise in raw material prices supported higher finished goods prices.
In the calendar year 2020, the pandemic disrupted production of stainless steel, globally, as it stood at 50.90mn mt, down by 2.5pc compared to the year prior. SS melt production in India was 3.17mn mt, down 19pc from the prior year.
Sales volumes rose 15pc in Q4 (January-March) to 255,099mt, compared to the year prior levels. Domestic stainless steel markets in India recovered sharply in the period.
Demand from the auto sector was sturdy in Q4 and demand recovered significantly from the pipe & tube segment and railways & allied infrastructure, specifically, the metro segment. Demand from elevators, lifts and hollowware is expected to continue its rise.
Exports slipped to 16pc of total sales volume in Q4 while the share of domestic sales rose to 84pc, gaining 24pc from Q4 2020.
JSL’s consolidated net revenues in Q4 has jumped 26pc to Rs39.14bn ($0.53bn). For the entire fiscal year, revenues slipped 6pc to Rs121.88bn. The company’s Q4 net profit was reported at Rs2.65bn against a net loss of 0.22bn in the same quarter last year. For FY21, the company’s net profits have zoomed five-folds to Rs4.19bn compared to FY20.