Jindal Stainless is considering the breakbulk shipping method for its exports, as container shortages and soaring costs are driving up expenses, according to managing director Abhyuday Jindal.
The largest stainless steel producer in India aims to export 10-15% of its production in the current fiscal year, targeting markets in the US and Europe. However, exports in the June quarter dropped to 10%, down from 17% in the same period last year, due to stagnant growth in these regions. The company attributed the decline to extended transit times and increased freight costs related to the ongoing Red Sea issues, as well as a shortage of containers.
Jindal highlighted that the cost of containers has increased significantly, sometimes by as much as 300%, with an average doubling in many areas. Despite these concerns, Jindal mentioned that using breakbulk shipping could reduce ocean freight costs by 15-25%, depending on the destination port.
Jindal Stainless has already experimented with a few breakbulk shipments, receiving approval from its clients, and plans to increase this mode of transportation starting in the current quarter. The company is also expanding into new export markets, including strategic applications in Japan, marking its first entry into this market.
The company faced challenges in the June quarter due to the high costs of containers and lower stainless steel prices, influenced by increased imports. Despite a 5% increase in sales volume to 578,143 tons, consolidated sales fell by over 7% to Rs 9,430 crore (approximately $1.1 billion), and net profit declined by more than 12% to Rs 646 crore (about $78 million).
Looking ahead, Jindal Stainless expects a rise in exports and is optimistic about domestic demand
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