Lack of QCO delaying capex in stainless steel industry: Jindal Stainless MD

Jindal Stainless MD says anti-dumping plea filed against China-Vietnam-Indonesia as imports rise

Lack of QCO delaying capex in stainless steel industry

 

The government recently extended the exemption granted to stainless steel products from mandatory Quality Control Order (QCO) compliance and excluded the stainless steel from recent anti-dumping measures imposed on import from Vietnam. Abhyuday Jindal, managing director of the ₹39,000-crore Jindal Stainless Ltd (JSL), in an in-person interview with Saket Kumar, says the QCO exemption is hurting capital expenditure in the sector. Edited excerpts:

 

The government has imposed duties on steel imports from Vietnam, but excluded stainless steel. Do you think that is a miss?

Anti-dumping duties depend on the product categories cited by the domestic industry. Indian Stainless Steel Development Association (ISSDA) filed an anti-dumping duty application with Directorate General of Trade Remedies (DGTR) in June, and the case was initiated in September. There is definite injury from subsidised imports dumped from China and Vietnam, so some protection is essential. The investigation is on and we are hopeful relief will come within a year. Our application mainly covers cold-rolled stainless steel, which accounts for 75 to 80 per cent of total stainless steel usage. We have applied against China, Vietnam and Indonesia because Chinese material is routed through them. We have no issue with Japan, Korea or other fair suppliers.

 

What has been the impact of the QCO exemption on pricing, volumes and product segments? 

Sentiments have already been impacted. QCO ensures quality, but with its suspension, low-cost material without proper practices, R&D or testing is coming in. With suspension, two impacts occur. Sentiments get weakened and manufacturers delay capex. While steel imports are 6 to 7 per cent of consumption, stainless imports are around 25 per cent of total consumption in the country, which mainly comes from China and Vietnam in low-quality segments such as pipes, tubes and utensils where testing parameters are weak. This harms consumers. Margins will come under pressure. We supply across industries, including auto, process industries, and railways. So, there will be an impact. MSME manufacturers will be severely impacted. Our fear is that MSME manufacturers who employ thousands of people may stop reinvesting.

 

With Carbon Border Adjustment Mechanism (CBAM) uncertainty and US tariffs, how are the new export markets responding?

Response has been good. We have been part of the stainless steel industry for over 50 years. The US and Europe were always our primary export markets, but with CBAM and the US imposing 50 per cent duty, we had to develop new markets. Europe and the US market combined make close to 65-70 per cent of our total export volumes. The volume in Japan, Korea and the Middle East is currently on the lower side, but it is picking up.

 

What is the status of the ₹40,000 crore Maharashtra investment plan? 

The process of setting up the 4 million tonne per annum plant has started. Land acquisition is underway. We expect to reach full capacity over 10-12 years. The first one million tonne is targeted for FY29-30. For the first one million tonne, investment figures are not final yet as we are still selecting technology and equipment partners.

 

When will the Sikunda chrome mine in Odisha begin operations and how much of your requirement will it cover? 

The mine will begin operation in two years. At full capacity, it should meet 35 to 40 per cent of our current requirement. With expansion in Maharashtra, we will need more chrome. The country needs more chrome mining and more asset exploration. Once the operation ramps up, we expect it to produce around 150,000 to 200,000 tonnes per annum.

 

Beyond the projects in Maharashtra and Odisha, what is the larger investment plan? 

These are large projects in themselves. As of now, no major greenfield project is planned, but if good assets come to us via NCLT for sale, we are open to examining them. However, our focus remains in the stainless steel domain. We want to ramp up capacities of recent acquisitions. Growth potential in stainless steel is significant, and if we have the government’s support to help protect manufacturers, industry has a long way to go.