The maritime security crisis in the Red Sea region threatens to impact the exports of India’s Jindal Stainless Limited (JSL), forcing it to lower its export growth target in the fourth quarter of the Indian fiscal year, JSL managing director Abhudhay Jindal said in a statement on Friday, January 19.
Mr. Jindal said that the stainless steel export growth target of 15 percent set for the fourth quarter (January-March) of the fiscal year 2023-24 has now been lowered to 12 percent.
“Due to the Red Sea issue, both our time to Europe and our cost to Europe have increased. The volume we were achieving before the fourth quarter is expected to be impacted until the Red Sea matter is resolved. Europe’s slower pace of recovery, compounded by geopolitical issues, contributes to our cautious outlook. We anticipate a decline in the fourth quarter export sales, so we are revising our target from 15 percent to 12 percent,” Jindal said.
“Despite these challenges, we maintain our volume guidance, as strong domestic demand provides optimism for the future. Despite a global slowdown in stainless steel markets, the domestic market has been witnessing steady growth. Given the promise that India holds for the near and far future, we are confident of meeting our volumes in the next quarter,” he said.
He added that the company’s board has given its in-principle approval to make Iberjindal, Spain, a wholly-owned subsidiary of JSL. The company currently owns 65 percent of its Spanish subsidiary which acts as a service centre.
“The demand for stainless steel in European markets is robust. This move – the increasing stake in Iberjindal - has garnered substantial interest from major customers in Spain, Portugal, France, and Italy, expressing a desire to enhance their business partnerships with us. To accommodate this growing demand, maintaining our service center, alongside the need for warehouses, becomes imperative. The upward trajectory of stainless steel demand in Europe reinforces our commitment,” he said.