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Jindal Stainless Ltd of India has decreased its export projection for the fiscal year ending March 31 due to Red Sea freight problems and weak demand in Europe and the United States, according to a top official.
The largest producer of stainless steel in India, Jindal Stainless, told Abhyuday Jindal, managing director, that the company expects to ship out 10-12% of its expected total sales of about 2.1 million metric tonnes in 2023–2024, which is less than its earlier expectation of 15%.
According to Jindal, the company is looking at "new options" and a "variable freight model" to address the difficulties brought on by the Houthi militia's attacks on ships in the Red Sea, which is aligned with Iran. He withheld information about the possibilities his company was considering.
Under a variable freight model, the company could pass on changes in ocean freight charges to its customers. Jindal said that 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. "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. Jindal said that since the Middle East accounts for a small portion of sales, the impact of instability in the region was minimal.
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. Sectors such as defence, aerospace, healthcare, and renewable energy consume a lot of stainless steel.
However, he said, suppliers from China and Vietnam had increased dumping of some grades of stainless steel, which greatly affected domestic producers.
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, earlier reported by Reuters.
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