According to The Economic Times (India), Jindal Stainless is committed to further reduce its reliance on imported raw materials. Three years ago when the company started its reduction campaign, Jindal imported 65% of all its raw material requirements; today, the figure stands at 45% with the intention to reduce this to 35% by 2021.
Sourcing material domestically would carry much lower financing costs and would also reduce manufacturers’ exposure to various market price and foreign exchange risks.
However, strong demand for Indian ferro-chrome from the stainless steel sector, coupled with low chrome ore supply, has helped to squeeze the market and push prices up to 20% higher of late. Despite this recent surge, chrome prices in India are still much lower than the benchmark South African producer price of Fe/Cr.
In general, India’s stainless steel industry is still producing at levels much lower than prior to the COVID-19 pandemic. With the recent reported surge in virus cases in India, there was talk of reimposing lockdowns on September 25 but these rumours have recently been declared “fake news” by the Indian government. Nevertheless, the rising number of infections is continuing to hinder recovery in this market.
