Tata Steel sees good Europe demand, but at lower margins

Steel making giant Tata Steel posted a 122% jump in its net consolidated net profit for the third quarter of fiscal year 2010. Its PAT came in at Rs 1,003 crore versus Rs 473 crore, on a year-on-year (YoY) basis. Its consolidated net sales were up 9.74% at Rs 28,610 crore versus Rs 26,070 crore, YoY.

While addressing the press on the company's growth plans, the management (comprising of Tata Steel's MD HM Nerurkar and Group CFO Kaushik Chatterjee and Karl Kohler, MD of Tata Steel Europe) said that it has initiated the Orissa Steel Plant operations. Talking on the global demand avenues for steel, the management said it saw demand in Europe rising 3-5% this year. However, they quickly added that European margins were under pressure on inflated raw material costs and managing them was a key challenge to pursue in a short period of time. In fact, "the European construction sector will remain weak this year," Kohler stated. While discussing options with the world's third-largest mining company Rio Tinto, the company, the management said, is also interested in securing coal supplies from Australian mining firm Riversdale. On the domestic front, the company feels that demand for steel is to remain robust. "We aim to achieve 6.4 million tonne output target for this year," the management said. Tata Steel