At current steel prices, margins don't justify investments

A bunch of factors were at play in the second quarter of FY25 for Tata Steel – restructuring in the UK, Kalinganagar expansion, and weak market conditions. In a telephonic interview, TV NARENDRAN, managing director and chief executive officer (MD & CEO), Tata Steel, tells Ishita Ayan Dutt that in many ways, Q2 was the worst, and that Q3 also comes with challenges. Edited excerpts:

- TV NARENDRAN MD & CEO, Tata Steel

Cheap imports and weakness in global markets are weighing on your Indian and European operations.

What is the outlook for the December quarter?

We are not out of the woods yet. We are still in a fairly challenging market situation. We have guided that realisations in this quarter in India will be about ₹2,000 less per tonne compared to Q2. In the UK, we will be about 50-55 pound lower and in the Netherlands, about 70 pound lower. On the cost side, the coking coal cost will be about $20 per tonne lower in India, and in the Netherlands, it will be about $10 lower. So, there is still pressure on the margins for Q3. I hope things will get better going forward. At least in steel prices, the low point was about $450 per tonne in August internationally and now it's around $500 per tonne. Hopefully, if the Chinese stimulus works a bit, then the exports will drop, which can help the prices.

Losses in the UK have widened despite closure of blast furnaces. When do you see a turnaround?