Stainless Steel Me

India’s top stainless steel maker, JSL Ltd (Jindal Stainless), will post its first ever annual loss in 2008/09, hit by volatile raw material prices and longer-than-expected shutdowns, an official said on Wednesday.

N.C. Mathur, director for corporate affairs, also said JSL had deferred by a year investments of 50 billion rupees into expansion, as demand for the rustproof steel remained slack while the outlook was “tough” for six months.

Much of JSL’s steel is used in the infrastructure and industrial sectors, which have been hit hard by the economic downturn. India’s industrial production has contracted and infrastructure output has been sluggish in the quarter.

“Demand is slack,” Mathur said on the sidelines of a steel conference, “We had a huge cost of nickel inventories. We had done some shut downs, which took longer than expected.”

JSL, which controls 35 percent of the Indian market, posted losses in the December and the September quarters, and saw profits plunge two-thirds in the June quarter. It has not yet published March quarter results.

Much of the losses were due to souring bets on foreign exchange and commodity prices, as prices of nickel MNI3, a key ingredient, collapsed nearly two-thirds in the fiscal year.

Mathur said JSL was likely to post sales of 50 billion rupees in 2008/09, and production would have been 500,000 tonnes. It had an installed capacity of 600,000 tonnes per year.

JSL raised its annual capacity to 720,000 tonnes this fiscal, but plans for a 800,000 tonne plant in Orissa has been deferred to 2011 from 2010. Its plan to expand its Indonesian unit has also been slowed, he said.

Company overview courtesy Reuters

Jindal Stainless Limited (JSL) is a stainless steel products manufacturing company. It has export markets in over 40 countries including United States, Europe, Middle-East and South Asian countries. JSL has integrated operations from mining, melting, casting, hot rolling to cold rolling. The product range includes stainless steel slabs and blooms, hot rolled coils, plates, cold rolled coils / sheets and products in precision. JSL has ferro-chrome manufacturing facilities in Jaipur, Orissa. JSL is setting up a Greenfield integrated stainless steel project in the state of Orissa with capacity of 1.6 million tons per annum. It manufactures a range of products for sale in the domestic market for customers in segments, such as architecture, building construction, automotive, white goods and appliances, railways, power plants and other industrial applications. JSL also produces stainless steel for speciality products, such as razor blades, precision strips and coin blanks.