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Inertia Steel CFO Jatin Ravindra Gaikar resigns

The company has not yet disclosed its plans for appointing a new CFO.

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Inertia Steel, a trading company specialising in iron and steel, has announced the resignation of its Chief Financial Officer (CFO), Jatin Ravindra Gaikar, effective October 14, 2024.

In a regulatory filing with the BSE, Gaikar attributed his resignation to unavoidable circumstances that prevented him from continuing to dedicate time to the company’s operations.

Gaikar had assumed the role of CFO in August 2023. The company has not yet disclosed its plans for appointing a new CFO.

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Steel Sector Faces ?89,000 Crore Challenge

Rising imports strain steel companies’ resources.

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The Indian steel industry is currently grappling with a significant challenge, with companies facing ?89,000 crore worth of unsold stock due to rising imports. This situation has escalated as increased foreign steel supplies, coupled with fluctuating domestic demand, have intensified market competition. The influx of cheaper imports is impacting local producers’ ability to maintain price stability and profitability.

Industry leaders are concerned that the current market dynamics, driven by a demand-supply gap, are causing considerable financial strain on steel companies. The increasing volume of imports, especially from countries with lower production costs, is eroding the market share of domestic producers, making it difficult for them to compete effectively.

The situation is further complicated by price volatility, which affects production costs and the overall economic viability of steel operations. Companies are seeking intervention from the government to implement safeguard measures that would help protect the domestic industry from unfair competition and ensure a level playing field.

Analysts indicate that without prompt action, including potential tariffs or import restrictions, the steel sector may face severe consequences, including production cuts and layoffs, as companies struggle to clear their stock and maintain operational continuity.

The manufacturing sector relies heavily on steel, making this issue critical not only for steel producers but also for broader industrial growth. The government’s role in facilitating fair trade practices and supporting local businesses will be vital in addressing these challenges and ensuring the sustainability of the steel industry.

In conclusion, the steel companies are at a crossroads, with significant implications for the economy. Addressing the challenges posed by rising imports will require coordinated efforts between the industry and the government to foster a more resilient and competitive domestic steel sector.

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India’s Push for Green Steel Manufacturing

New incentives for green steel development.

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The Indian government is crafting a special incentive package aimed at accelerating green steel manufacturing within the country. Spearheaded by the Ministry of Steel, this initiative seeks to support India’s transition to sustainable industrial practices by encouraging the steel sector to adopt low-carbon production methods. Traditional steel production is highly energy-intensive and contributes significantly to carbon emissions, making decarbonization a priority as India advances its net-zero goals.

Key components of this incentive package include promoting green hydrogen and renewable energy sources for steel production, offering financial incentives and subsidies for companies investing in green technologies. Additionally, the package will support the establishment of electric arc furnaces, which are less carbon-intensive than traditional coal-based blast furnaces, allowing manufacturers to reduce their fossil fuel dependency.

This incentive aligns with India’s broader objectives to minimize its carbon footprint and lead by example in climate responsibility. The initiative supports the use of renewable power, carbon capture, and recycling to decrease emissions and create a more environmentally responsible steel industry. Green steel production, relying on hydrogen-based methods and scrap-based electric furnaces, also aims to reduce import dependency for critical resources like coal, enhancing energy security and resource efficiency within the industry.

Moreover, as global demand for green steel rises, this package positions Indian manufacturers to remain competitive in international markets that are increasingly enforcing low-carbon mandates. India’s steel industry—among the largest in the world—would benefit from such incentives, facilitating technological advancements and attracting foreign investment into the green steel sector. These incentives are also part of India’s commitment under the National Steel Policy and the Paris Agreement to develop a clean energy ecosystem and reduce overall emissions across sectors.

By encouraging innovative and sustainable practices, the government’s plan is expected to not only stimulate economic growth but also pave the way for a greener industrial future, contributing to India’s stature as a global leader in sustainable steel manufacturing.

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JSW Steel Cuts FY25 Capex Plan

JSW Steel reduces FY25 capex, defers expansion.

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JSW Steel has announced a substantial reduction in its capital expenditure (capex) plan for FY25, slashing it by up to Rs 4,000 crore as part of a strategic re-evaluation of ongoing and future projects. The steel giant decided to defer its Vijayanagar plant’s Blast Furnace 3 expansion, a major project originally slated to significantly boost its production capabilities. The move is largely driven by cost-control measures in response to changing economic and market conditions within the steel industry.

The original capex plan, designed to fuel growth and meet the projected demand surge in India and overseas, has been adjusted as JSW Steel takes a cautious approach to capital allocation. The deferred Vijayanagar expansion would have included adding substantial capacity at one of India’s largest steel manufacturing facilities. However, the company’s revised strategy now prioritizes optimizing current assets and enhancing operational efficiency over new expansions, signaling a focus on financial stability amid fluctuating market dynamics.

This capex reduction reflects JSW’s strategic pivot in response to global economic pressures, aiming to maintain a resilient balance sheet and manage expenditures while still achieving core operational goals. The company emphasized that while certain high-capex initiatives are on hold, it remains committed to completing essential projects to support the growing infrastructure demand, especially in domestic markets.

The capex adjustment aligns with broader trends in the steel sector, where companies are recalibrating their investment strategies due to rising input costs and market uncertainties. By scaling back and focusing on current facilities, JSW Steel aims to bolster its financial position, ensuring sustainable growth in a challenging environment.

The deferral of the Vijayanagar blast furnace expansion illustrates the company’s adaptability and focus on long-term growth. This strategic shift is expected to maintain JSW’s stronghold in the Indian steel industry while positioning it to capitalize on future growth opportunities with a leaner, more flexible financial approach.

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