Jindal Stainless is experiencing operational disruptions due to the ongoing Middle East war crisis, which has affected the availability of essential industrial gases crucial for its stainless steel production processes.
The company has reported that its reliance on industrial gases such as propane, LPG, and natural gas has led to adverse impacts on several processes across its plants. Unlike the conventional steel industry, which uses blast furnace and coke oven gases, the stainless steel industry relies on a scrap-based production route, lacking internal generation of these gases. As a result, Jindal Stainless is operating at a rationalised capacity due to fuel constraints.
Furthermore, the crisis has disrupted global shipping routes, causing vessel diversions, longer transit times, and cargo delays. These logistical challenges are adding pressure on the company’s supply chains and margins. Jindal Stainless has acknowledged the government’s efforts to prioritise fuel allocation for critical sectors and emphasised the need for clarity on allocation percentages and assurances of regular supplies to optimise operations.
The company warns of a potential cascading effect across the industry if these issues are not resolved swiftly, with the severity depending on the speed of resolution.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).