Impact of steel export duty cut to translate by March, says Jindal Stainless
CNBC-TV18 spoke to Union steel minister Jyotiraditya Scindia who said that time was right to remove steel export duty. “It is only after many iterations of discussions and very long deliberations that we arrived at the conclusion that we are in favour of lifting these export duties,” Scindia said.
The government has withdrawn export duties on most steel and iron ore products levied in May this year. The steel ministry says that the rollback decision was taken on the back of a steep fall in steel exports in October.
Vijay Sharma, Director, Jindal Stainless welcomes this consideration by the central government and believes that the impact of this duty withdrawal is likely to be seen in February or March.
“Export duty imposition was also very sudden and withdrawal is also very sudden. Though we are very happy with that, we are working on it. However, stabilizing the total supply chain will take a couple of months. So this financial year, the export volume impact – post this duty withdrawal – is likely to be seen in February or March,” he said.
CNBC-TV18 spoke to Union steel minister Jyotiraditya Scindia who said that time was right to remove steel export duty. “It is only after many iterations of discussions and very long deliberations that we arrived at the conclusion that we are in favour of lifting these export duties,” Scindia said.
He added that the steel industry was facing a lot of pressure on the pricing front. “We were apprehensive that commodity prices, also as international forecasters had put in place, may start rising again. So there will be multiple pressures on the steel industry with regards to pricing. So we were dynamically monitoring that and I had committed to the steel industry that we will take a view one way or the other in November, and through multiple deliberations we concluded on the view that the time has come now to remove this export duty,” he said.
As per the Finance Ministry notification, exports of iron ore lumps and fines less than 58 percent Fe will attract zero duty while exports of iron ore lumps and fines greater than 58 percent Fe will attract 30 percent duty. Export of iron ore pellets will attract zero duty.
The company is confident of maintaining the earlier guidance of EBITDA/tonne at Rs 18,000 despite global uncertainties as there is stability in volumes on the domestic front.
Overall debt of Jindal Stainless has been reduced by 40 percent in the last two years or so and it currently stands at Rs 2,750 crore.
However, the company is in the expansion mode. Jindal United Steel Ltd (JUSL) acquisition is, which is likely to happen within this financial year, will add about Rs 2,000 crore debt to the company’s existing debt levels.
So the total debt of Jindal Stainless by the end of FY23 will be at Rs 4,750 crore.
Sharma is hopeful that the merger will happen within this financial year.
For the full interview, watch the accompanying video
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