Indian companies with manufacturing operations in the US, particularly Hindalco Industries’ Novelis subsidiary and JSW Steel, stand to gain from the latest trade actions.
Novelis, a key player in aluminium packaging and a major supplier to the automotive and aerospace industries in North and South America, operates a large facility in Bay Minette, Alabama. Analysts suggest that higher tariffs on imports may drive up the Mid-West premium, benefiting Novelis through increased recycling margins. Despite potential demand fluctuations, Novelis’ shipments for can sheets, autobody sheets, and specialty products are expected to remain stable.
Similarly, JSW Steel, with a manufacturing capacity of 1.5 MTPA in Texas and Ohio, could capitalize on reduced competition due to the tariff hikes.
Hindalco, backed by the Aditya Birla Group, is increasingly reliant on Novelis, which accounted for over 60% of its revenue in the quarter ending September 30, 2024.
On the flip side, European steelmakers could bear the brunt of these tariffs as they rely on the North American market to offset weak demand and supply surpluses in Europe, particularly in the EU.
