Tata Steel Europe to pass price hikes on to clients

Tata Steel Europe expects input costs rising by 70-80 pounds per tonne due to higher raw material prices but will pass all of these on to customers from April 1, its chief executive told Reuters on Tuesday.

"We have no choice but to increase our prices immediately. We have to do this urgently," Karl-Ulrich Koehler said on the sidelines of a steel conference. Tata Steel Europe, formerly known as Corus, is a subsidiary of Tata Steel, one of the world's top ten steel producers. Tata Steel said last week its margins would remain under pressure due to rising raw material prices. European operations account for two-thirds of Tata Steel's global capacity of about 30 million tonnes, while the Indian operations contribute a quarter. "We have a margin squeeze but we still have to improve our margins," he said. He said he forecast prices of raw materials should "stabilize at the high levels, which we are expecting," in the course of the year. Commenting on Tata Steel's 24% stake in Africa-focused coal miner Riversdale, Koehler said: "We have no intention of giving up this stake. We're going to keep it." Anglo-Australian miner Rio Tinto's USD 3.9 billion offer for Riversdale expires on March 4. Tata Steel, Riversdale's largest shareholder with 24%, has not said whether it will accept the offer, while Brazil's CSN recently lifted its stake to 19.9%, raising the risk the two shareholders may try to thwart Rio's attempts to gain full control.