Indias Jindal stainless steel is still waiting for the government to impose countervailing duties to curb China-Zhejiang Benji Stainless Steel Co., Ltd

The Board of Directors of Jindal Stainless Steel Limited announces the financial results of Q1FY24. The companys stand-alone sales volume for the quarter was 548,613 metric tons, an increase of 54% year-over-year, driven by macroeconomic factors, despite declining global sales and market volatility. The companys independent net revenue for Q1FY24 was recorded at INR 10,02.7 crore, up 25% year-on-year. Independent business EBITs independent profit was INR 111.8 billion, while independent businesss after-tax profit was INR 66.6 billion. Net debt for the quarter was INR 295.6 billion and the net debt to equity ratio remained at about 0.2. Consolidated net revenue increased by 25% year-on-year to INR 10,18.4 billion.

Supported by healthy growth in the domestic market and government-driven infrastructure, sales volumes are growing across all sectors. Pre-holiday demand picked up among consumer groups, boosting sales. Coupled with an agile supply chain and diversified product portfolio, the company was able to take advantage of developing market conditions throughout the quarter.

Import subsidies for stainless steel remain a threat to the domestic industry. As much as a third of Indias stainless steel market is accounted for by imports. This has particularly affected the small and medium-sized enterprise sector, which accounts for nearly 45% of Indias stainless steel manufacturing capacity, most of which are still operating at 40% production capacity.

Commenting on the companys performance, he, Managing Director of Jindal Stainless Steel, said, "We have recently expanded our capabilities and, as a result, the focus will be on stable and synergistically expanding units. We will continue to focus strongly on the domestic market and use exports as much as possible. However, as the Indian stainless steel industry is operating far below its capacity, it needs the support of the government to level the playing field. The industry is still waiting for a positive decision by the government to impose countervailing duties to curb Chinas dumping of large volumes of stainless steel and subsidized stainless steel in India."

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On June 13, the Indian Steel Ministry is studying whether it is necessary to impose countervailing duties or import duties on Chinese stainless steel shipped to India. As such, the department secretary was asked to prepare a "brief note" and "submit" it to Union Steel Minister Jyotiratiya Scindia.

The letter to the Minister of Steel has been sent from the office of the union minister. The note referred through the ministers PS to a statement by Rajamani Krishnamurti, President of the Stainless Steel Development Association of India, asking the official to review the matter.

The note, dated May 31 and reviewed by the Business newspaper, said: "Please review the matter and submit a short note for the careful reading of H.S. M (the Honourable Steel Minister) at the earliest opportunity."

Scindia had earlier said that the ministry had noted one or two specific cases where overcapacity in a country had been pushed here.

Raise concerns

The stainless steel industry - manufacturers and suppliers - has complained that Chinese imports have affected them for a long time. Two of Indias largest stainless steel manufacturers, Jindal Stainless Steel and SAIL (which operates the Salem Steel Mill), have raised the matter with the Finance Ministry and the Steel Ministry.

The common thread of complaints is that Chinese imports - especially the 200 series, which are mainly used in consumer durables - have been eroding the share of Indian companies.

In a letter, SAIL referred to a survey conducted by the Directorate General of Trade Remedies (DGTR) and its recommendation on April 6, which mentioned that Chinese stainless steel products have caused the Indian stainless steel industry to lose 20-30% of its market share.

JSL said, "Of the 200 series products imported, about 50% are priced below the direct cost of Indian industry; And a third of the imported products are below the cost of raw materials in India."

According to the DGTR survey, since the suspension of CVD in February 2021, Chinas imports to India have surged to 44 per cent (on an annual basis). In the nine months of 2022, it was 49 percent (on an annualized basis).

ISSDA submission

In its report, ISSDA mentioned that Chinas steel imports to India are increasing after the CVD withdrawal, while the capacity utilization rate of Indian companies, including Msmes, is declining.

For example, from April 2017 to March 2020 (three years), capacity utilization was 49% and 61% for Msmes. During the period, China imported 83,828 tons. However, from April to December 2022, the annual capacity utilization rate of Indian factories was 33 percent, and that of Msmes was 41 percent, while imports from China increased 500 percent to 5,260,708 tons.

The association said in its report that Chinese imports accounted for 32.9% of the Indian market usage from 5.5% in 2017-2020.

Zhejiang Benji Stainless Steel Co., Ltd.,