Business
Indian stainless steel sector drowning in Chinese imports
The first half of 2021-22 has seen a 185 per cent increase in stainless steel imports compared to the average monthly imports in the last fiscal, creating havoc for the Indian players.
The import tide of stainless steel from China and Indonesia is fast turning into a deluge destroying many companies on its way, and threatening the very existence of the small, medium and micro industries in India. After all, the first half of 2021-22 witnessed a staggering 185% increase in import volumes of stainless steel flat products compared to the average monthly imports in the last fiscal, fuelled mostly by surge in Chinese and Indonesian imports.
The two countries China and Indonesia, which increased their exports by 300 per cent and 339 per cent, respectively, in the first half of this fiscal compared to the average monthly imports of the last fiscal, now have a share of 79 per cent of the total stainless steel flat product imports in the first half of FY22. It is a significant jump compared to the 44 per cent share in FY21. The average per month imports has jumped from 34,105 tonnes per month in FY21 to 63,154 tonnes per month this current fiscal–FY 22.
Indonesia’s imports share, which was virtually non-existent in 2016-17, has climbed to 23 per cent in the first half of this fiscal, with its average monthly exports increasing from 4,355 tonnes/month in the last fiscal to 14,766 tonnes/month in the first half of this fiscal. China’s average monthly exports too has jumped from 10,697 tonnes/month in the last fiscal to 35,269 tonnes/month in the first half of this fiscal.
The surge in imports was the result of the Finance Ministry’s decision of September 30, 2021 to revoke the imposition of CVD on China (September 2017) and end provisional duties on Indonesia (October 2020), which was based on the recommendations of the Director-General of Trade Remedies (DGTR), after a detailed investigation. The investigation had revealed that the two countries were resorting to non-WTO compliant subsidies to boost their exports to India and causing injury to Indian manufacturers.
In fact, the DGTR and their global counterparts had conclusively proved in its final finding that both these countries provide non-WTO compliant subsidies to the tune of 20 per cent to 30 per cent to their stainless steel manufacturers. And, these subsidies have created an imbalance in the Indian and international markets, reduced the competitiveness of Indian products in the domestic industry, causing material injury and persistent financial stress for home-grown businesses. It has forced the domestic industry to seek redressal from the surge in imports.
In fact, in India a disaggregated study of imported products in the first half of the current fiscal also reveals how excessive dumping has taken place in a particular J3 grade of stainless steel in the country. Imports of J3, a subsidised and dumped 200 series grade of stainless steel, with about 1 per cent nickel and 13 per cent chromium from China, has jumped from an average of 1,779 tonnes/month in 2019 to an average of 4,425 tonnes/month in 20-21 (249 per cent increase) and to average 25,346 tonnes to in just six months of 2021-22 (1,424 per cent) increase compared to the same period last year.
The share of this grade in total imports from China increased 23 per cent in 2019-20 to 72 per cent in 2021-22. Much of this import is even below the scrap prices and it hurts the MSME sector, the hardest. Such dumping also means major losses in terms of national exchequer through tax evasion and revenue losses.
This onslaught of Chinese exports to India has decimated the micro, small and medium enterprises (MSME), which had to bear the brunt of the impact. In fact, the imposition of provisional CVD on Indonesia in October 2020 and CVD on China in place from September 2017, had provided a “level-playing field” to these players, which got a much-needed relief from the dumped subsidised imports. The MSME, an industry having the capacity to produce about 1.2 lakh tonnes of hot and cold-rolled flat products, was able to operate at 90 per cent plus capacity utilization between October 2020 to February 2021.
However, the MSME sector suddenly finds itself grasping for breath to survive after the announcements of the 2021-22 Budget. Small-scale stainless- steel rollers and re-rollers, who make ingots from recyclable scrap as the first step in stainless- steel product manufacturing, and then produce hot and cold rolled materials for the all-India market, find themselves swamped by a massive and subsidised surge of imports from China and Indonesia.
Today, more than 80 induction furnaces and 500 patti/patta units, which provides primary raw materials for various downstream industries, are in dire straits. These downstream industries manufacture a variety of stainless steel household goods such as kitchenware, tableware, cooking range, sanitary items, cutlery pots, etc.
Prakash Jain, President, All India Stainless Steel Cold Roller Association, says: “The smaller Indian stainless steel players finds it virtually impossible to compete with the state-subsidised Chinese players, who get an 18 per cent incentive to export, under invoice their products by changing the label of the products to avoid paying duties and sell it at Rs 15 to Rs 17 per tonne cheaper in the Indian market.”
According to Jain, Gujarat has 70 rolling mills, each employing around 300 people and 50 induction furnaces, which makes ingots, the raw material for rolling mills and employs 500 each.
Not only will many of these jobs be lost resulting in massive unemployment but force many manufacturers to turn traders unless the CVD is imposed on imports from China and Indonesia.
Business
Sensex May Touch 1.15 Lakh And Nifty 43,876 By FY28 In Bull Case, Says Ventura Stock Broking Report
Mumbai: In a bull case scenario, Sensex is projected to reach 115,836 and Nifty is likely touch 43,876 by the financial year 2028 (FY28), a report said on Friday.
However, in a bear case scenario, Sensex is projected to reach 1,04,804 and Nifty at 39,697 by FY28, Ventura, a stock broking platform, said in its recent projection.
Nifty is expected to oscillate within a well-defined price-to-earnings (PE) band in these three years, with projected robust earnings growth with estimated FY28 earnings per share compound annual growth rate (EPS CAGR) of 12-14 per cent.
“In the last 10 years, the Indian economy has demonstrated resilience and clocked the highest GDP growth as a large economy despite global headwinds of NBFC crisis, Covid 19, Russia-Ukraine war and the recent uncertainty on US President Donald Trump tariff,” said Vinit Bolinjkar, Head of Research, Ventura.
The risk mitigation influencers will outweigh the current challenges, which will usher Indian GDP growth to 7.3 per cent by FY30(E), he added.
By FY28, the Indian index will be at a PE level of 21 times in the bull case and 19 times in the bear case with an estimated earnings-per-share (EPS) of 5,516 for Sensex and 2,089 for Nifty 50, the report stated.
Over the past ten years, India has demonstrated extraordinary resilience by navigating a series of unprecedented disruptions without compromising its growth trajectory.
From the “Fragile Five” designation to demonetisation, GST implementation, a crippling NBFC crisis, and the dual shock of COVID-19 waves, India has withstood and adapted to adversity, the report highlighted.
According to the report, even global headwinds like the Russia-Ukraine war and Trump-era tariffs have failed to derail its momentum, underlining the robustness of the Indian economy.
As of the mid-season point for Q1 FY26 earnings, 159 companies have reported Q1 FY26 results, revealing broad-based strength across key sectors.
Engineering/manufacturing and services sectors have led the pack, while consumption, commodities, and pharma show steady performance, the report stated.
Business
Sensex – Nifty Open Lower Amid Weak FII Sentiment, Midcap & Smallcap Stocks Lend Market Support
Key Highlights:
– Sensex fell 171 pts, Nifty down 35 pts; midcaps, smallcaps held strong.
– FIIs sold Rs 3,694 crore worth of stocks; DIIs bought Rs 2,820 crore.
– Nifty’s bearish engulfing pattern suggests continued caution; 25,000 key support.
Mumbai: Indian equity benchmarks Sensex and Nifty began Friday’s session in the red, weighed down by selling pressure in large-cap stocks. At 9:25 am, the Sensex declined by 171 points or 0.21 percent to trade at 82,087, while the Nifty dropped 35 points or 0.14 percent to 25,075.
Heavyweights Drag, Broader Market Holds
Major drag on the indices came from key constituents such as Axis Bank, Bharti Airtel, Kotak Mahindra Bank, and HDFC Bank. Financial stocks, FMCG, and private banking segments were under pressure. However, midcap and smallcap segments outperformed, providing resilience to the overall market.
Gainers on the Sensex included M&M, Tata Steel, Power Grid, L&T, Infosys, and Maruti Suzuki, reflecting strength in sectors like auto, metals, and infra.
Sectoral Picture Mixed
On the sectoral front, gains were recorded in auto, IT, PSU banks, metals, realty, energy, media, infrastructure, and commodities. Meanwhile, financial services, FMCG, and private banking faced losses.
Technical indicators showed bearish signals, with Nifty completing a bearish engulfing candle on Thursday. Analysts highlight 25,000 as a key support and 25,340 as a vital resistance level.
FIIs Remain Net Sellers
Foreign institutional investors (FIIs) continued their selling trend, offloading equities worth Rs 3,694 crore on July 17 — marking the second consecutive session of net selling. Domestic institutional investors (DIIs), however, remained net buyers, purchasing Rs 2,820 crore worth of shares for the ninth straight session.
According to Dr. VK Vijayakumar of Geojit Financial Services, FIIs have shown a clear pattern of selling in July after buying in the previous three months. Without positive triggers, the downtrend could persist.
Global Cues Offer Some Relief
Asian markets traded mostly higher on Friday, with Shanghai, Hong Kong, Bangkok, and Jakarta in the green, although Tokyo and Seoul lagged. The US markets ended positively on Thursday, driven by upbeat investor sentiment.
Business
Indian Equity Indices Open Flat As Markets Await Fresh Triggers To Break Out Of Consolidation Phase
Mumbai: The Indian equity indices opened flat on Thursday, as markets looked for new triggers to break out of the consolidation range.
At 9.2 am, c was down 15 points at 82,619 and Nifty was down 2 points at 25,210. Buying was seen in the midcap and smallcap stocks. Nifty midcap 100 index was up 123 points or 0.18 per cent at 59,741 and Nifty smallcap 100 index was up 70 points or 0.37 per cent at 19,210.
On the sectoral front, auto, pharma, FMCG, metal, realty, energy, infra and PSE were major gainers, while IT, PSU bank, financial services and media were major losers.
In the Sensex pack, Sun Pharma, M&M, Trent, Kotak Mahindra, Tata Motors, NTPC, BEL, Titan and Power Grid were major gainers. Tech Mahindra, ICICI Bank, Eternal, Axis Bank, Infosys and HUL were major losers.
According to analysts, an India-US interim trade deal has been discounted by the market, leaving no scope for a sharp rally decisively breaking the range.
“One positive and surprise factor that can trigger a rally is a tariff rate much below 20 per cent, say 15 per cent, which the market has not discounted. So, watch out for developments on the trade and tariff front,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Most Asian stocks traded in a flat-to-low range. Tokyo, Shanghai, Bangkok and Jakarta were trading in the green while Hong Kong and Seoul were in the red.
The US market closed in the green on Wednesday due to positive market sentiment.
On the institutional front, foreign institutional investors (FIIs) continued to reduce exposure in India, selling equities worth Rs 1,858 crore on July 16. In contrast, domestic institutional investors (DIIs) remained consistent buyers for the 8th straight session, infusing Rs 1,223 crore, lending crucial support to the market amid global uncertainties.
The broader trend remains optimistic as long as key support levels are respected, said analysts.
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