Quarterly Report – February 2021

Jindal Stainless Ltd posted a remarkable increase in consolidated profits for its December 2020 financial quarter of INR 1.702 billion (US$ 23.3 million); this was more than three times the reported profit of INR 516.8 million (US$ 7.08 million) for the same period in the previous year. The company has stated that the increase reflected strong demand from the automotive, pipe/tube, metro rail and railway wagon sectors.

A rapid normalization of the supply chain after the COVID peak saw an increase in demand from urban and rural centres - aided also by renewed industry efforts - which helped to revive stainless steel demand in a relatively short period. However, some feel that the February 1 budget announcement by Indian Finance Minister Nirmala Sitharaman of a temporary suspension of countervailing import duties on stainless steel flat products will be an unintentional gift to Chinese and Indonesian manufacturers, hampering domestic stainless steel producers’ V-shaped recovery and damaging the “Make in India” movement.

On the other hand, the Finance Minister also announced a reduction to 0% of the Basic Customs Duties (BCD) on iron and steel scrap (including stainless steel scrap) until March 31 2022, which should assist domestic stainless steel producers.

Fine reading of the relevant customs notification, however, still refers to a BCD of 2.5% for stainless steel scrap while that for MS scrap (under the same HS code 7204) has indeed been cut to nil. In light of this, the Indian Stainless Steel Development Association has approached the ministry for clarification, although this has yet to be received at the time of writing.

Andre Reinders - Andre Reinders (India)

Andre Reinders

Nimomet LLC (ARE)

Quarterly Report – February 2021