New Delhi: Tata Steel expects its European operations to improve from the next quarter on the back of falling energy costs, its chief executive and managing director said on Thursday.
“Europe is still struggling but things are getting better because energy prices have come down,” T.V. Narendran told Reuters in an interview.
“So costs are coming down, not yet realised in our bottomline because we have some hedges on gas prices, which will play out over the next quarter or two.”
Falling demand in Europe and weaker steel prices hurt the company’s revenue in the March quarter.
European operations, which account for roughly 35% of total revenue, fell about 17% to 220.36 billion rupees ($2.70 billion) during January-March.
The company, backed by India’s Tata Group, expects the ongoing quarter to be challenging for European operations. However, the Indian market is expected to be stable, boosted by infrastructure spending.
Narendran said there are incentives in Europe for its push to make “green” steel or steel made without using fossil fuels, though in India the company’s efforts were voluntary.
The company aims to achieve net zero carbon emissions by 2045.
“Whatever we are doing (in India) is because we think it’s the right thing to do, not because there is an incentive for us to do so,” Narendran said.
Late last month, the steel maker had conducted a trial for injecting hydrogen gas at its blast furnace in the company’s flagship plant in the eastern city of Jamshedpur.
The company has also been exploring the option to raise a green loan, Narendran said.
Narendran expects prices of steel to remain volatile in the range of $500-$700 per tonne, and coking coal – a key raw material – to be between $250 and $350 per tonne.
“Fundamentals are strong in India, we are waiting to see how China does in the rest of the year.”
To steer its troubled assets in the UK, Narendran said the steel maker has proposed a 50% injection of capital expenditure from the government, and sought cheaper electricity to support its transition to green steel.
($1 = 81.7650 Indian rupees)
(Reporting by Neha Arora in New Delhi and Varun Vyas in Bengaluru)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
Also read: Factbox-India’s Wadia Group whose Go First is in trouble