India's Jindal Stainless cuts export forecast on Red Sea crisis, weaker EU, US demand

Jindal Stainless

25/01/2024 08:36

By Neha Arora and Mayank Bhardwaj
       NEW DELHI, Jan 25 (Reuters) - India's Jindal Stainless
Ltd  JIST.NS  has cut its exports forecast for the fiscal year
ending March due to freight disruptions in the Red Sea and
faltering demand in Europe and the United States, a top
executive said.
    India's biggest stainless steel manufacturer hopes to ship
out 10-12% of its estimated overall sales of over 2.1 million
metric tons in 2023/24, down from its previous forecast of 15%,
Abhyuday Jindal, managing director of Jindal Stainless, told
Reuters in an interview.
    The company is exploring "new options" and a "variable
freight model", Jindal said, as part of efforts to deal with the
challenges posed by attacks launched by the Iran-allied Houthi
militia on ships in the Red Sea. He did not give details of the
options being weighed by his company.
    Under a variable freight model, the company could pass on
changes in ocean freight charges to its customers.
    Challenges such as cargo disruptions in the Red Sea, rising
freight costs and weakening demand in Europe and the United
States emerged in the third quarter of this fiscal year to
March, Jindal said.
    "On account of logistic challenges and higher freight
charges, some of our export volumes have suffered," he said.
    Last year, the company said it would aim to boost shipments
to large buyers such as Russia and enter new markets in South
America and the Middle East.
    Since the Middle East accounts for a small portion of sales,
the impact of instability in the region was minimal, Jindal
said.
    Unlike Europe and the United States, India's steel demand is
buoyant due to a spurt in economic activity and a revamp of
broader infrastructure.
    Jindal said India's robust domestic demand would help the
company sell more locally, with sectors such as defence,
aerospace, healthcare and renewable energy consuming a lot of
stainless steel.
    However, suppliers from China and Vietnam had increased
dumping of some grades of stainless steel, and that affects
domestic producers immensely, he said.
    Reuters earlier reported that India's finished steel imports
from China touched a five-year high in the first eight months of
the fiscal year that began in April, and the government was
monitoring overseas shipments coming into the country.

 (Reporting by Neha Arora and Mayank Bhardwaj
Editing by Mark Potter)
 ((neha.dasgupta@tr.com))