Jindal Stainless MD says processes ‘adversely impacted’ due to heavy dependence on industrial gases, West Asia conflict
Jindal Stainless General Manager Abhyuday Jindal said today that operations at the company’s facilities have been “adversely affected” by the low supply of industrial gas required for stainless steel production.
Fuel constraints caused by disruptions to global shipping routes are also putting pressure on the supply chain and margins, the executive said on March 13.
Jindal Stainless’s Hisar (Haryana) plant produces about 0.8 million tonnes of stainless steel (MTPA) per annum, while its Jajpur (Odisha) plant produces about 2.2-MTPA.
‘Facilities are operating at a rational capacity’
“Due to the heavy dependence of stainless steel production on industrial gases such as propane/LPG and natural gas, many processes in our facilities have been negatively affected,” Jindal said.
He explained that unlike the traditional steel industry, which largely uses blast furnace and coke oven gases as an energy source, the stainless steel industry follows a scrap-based production path where such gases are not produced internally. “Given the constraints in fuel availability, our plants are operating at a rational capacity,” he added.
He also noted that the company’s supply chains and margins are also under pressure. “Disruptions to global shipping routes are causing ship diversions, longer transit times and cargo delays, which are also putting additional pressure on supply chains and margins,” he said.
‘Clarity of allocation percentage and supply assurance are important’
On expectations from the government, Jindal appreciated that the Center has “fully addressed the issue and is actively prioritizing fuel allocation for critical sectors”.
He added that clarity on industrial propane/LPG and natural gas allocation percentage as well as assurance of regular supply will also be important; thus the stainless steel industry can “plan and optimize operations”.
“In the absence of such clarity, we anticipate a cascading impact across the industry, the severity of which will depend on how quickly these issues are resolved,” Jindal said. he added.
Why is India facing shortage of LPG, LNG and oil?
US and Israeli attacks on Iran, followed by retaliation by the Islamic Republic, led to the closure of the Strait of Hormuz, a critical waterway that carries about 85-90% of India’s LPG imports from West Asia, including Saudi Arabia and Qatar.
India has been steadily reducing its dependence on the Strait of Hormuz to create a buffer against regional disruptions, with around 70% of its crude oil imports now coming through alternative routes, according to the Petroleum Ministry.
Sujata Sharma, Joint Secretary (Marketing and Oil Refining), Ministry of Petroleum and Natural Gas, said in a press conference on Friday that LPG remains a cause for concern but “it has not been reported to any agency in any of our 25,000 distributors”.
“Domestic LPG production has increased by 30 percent as of today, our refineries are now producing 30 percent more LPG compared to March 5,” he said.
In particular, US Trade representative Jamieson Greer said that they do not expect the Iran war to have a long-term impact. “Our expectation is that the effects we will see from the Iran war will be short-lived.”
