Subdued prices impact Tata Steel UK, Netherlands
The performance of Tata Steel’s UK and Netherlands operations was impacted by weaker steel prices in the fiscal half-year through 30 September, Kallanish learns.
Tata Steel’s UK operations reported revenue of £600 million ($779m) during the second quarter of fiscal 2025, while Ebitda loss stood at £147m. Liquid steel production was 390,000t, while deliveries were at 630,000t.
On a half-year basis, revenue stood at £1,246m and Ebitda loss at £238m.
Tata Steel chief financial officer Koushik Chatterjee says: “Our performance in the UK and Netherlands was adversely impacted by the compression in steel spreads. Further, the UK was also weighed by the transitory nature of operations as the blast furnaces were safely decommissioned and steel stock was built up to operate downstream.”
Port Talbot ceased iron making on 30 September, and has since confirmed it has selected Tenova to supply the EAF for the site.
“We have completed public consultation on the planning application and anticipate commencing large scale site work around July 2025. During our transition to green steel, we will operate our downstream operations by sourcing substrate. This will help us sustain our significant market presence across steel end use segments in the UK,” Chatterjee added.
The group’s chief executive, T V Narendran, notes: “[Q2] also marked the closure of our blast furnaces in UK. We have signed the grant funding agreement with the UK government and are progressing on the proposed transition to green steel. We remain fully committed to supporting affected employees and have offered the best ever package of support in Tata Steel UK.”
The UK government confirmed in September Tata’s £500m in funding for the transformation.
Subdued steel prices also weighed on performance in the Netherlands. Revenue for the segment in Q2 was £1,300m and Ebitda was £22m. Liquid steel production was 1.66 million tonnes and deliveries at 1.5mt, which the company says increased on a year-on-year basis.
For H1, revenue was £2,644m and Ebitda was £65m.
Narendran adds: “We are undertaking pilot projects to avoid or convert captured carbon emissions.” Chatterjee meanwhile confirms: “We are engaged with the government on support for the decarbonisation of our operations.”
Carrie Bone UK
Tata Steel signs contract for new EAF at Port Talbot site
The new EAF, expected to become operational at the end of 2027, will have a capacity for 3 million tonnes per year of steel.
By transitioning to the new EAF technology, the Port Talbot site will be able to produce green steel, Tata Steel said. It will reduce its carbon emissions by 90%, which is equivalent to 5 million tonnes of CO2 per year, the company added.
According to the company, the use of scrap in the new EAF will also reduce the UK’s reliance on imported iron ore.
The new EAF will be funded by a joint investment of Tata Steel and the UK government reaching £1.25 billion ($1.62 billion). Tata Steel will provide £750 million of the whole sum, and the investment of the UK government will be up to £500 million.
The grant from the UK government was approved on September 11.
The new EAF is supposed to replace the two blast furnaces (BFs) at the Port Talbot site, which were operational until recently. The two BFs had a capacity for 5 million tpy, but the company did not use the whole of it and explained that the annual output from the two BFs did not exceed 3 million tpy.
BF5 was closed in July this year, and BF4 was closed in September.
The Port Talbot site produced mainly hot-rolled coil and cold-rolled coil.
According to the contract with Tenova, the Port Talbot site will also receive new ladle metallurgy furnaces, which will allow the production of more complex grades required by manufacturers in the UK and other countries.
“Today marks an important milestone in making low-CO2 steelmaking a reality in Port Talbot, as well as reducing the UK’s carbon emissions and supporting our customers with their own carbon reduction targets,” T V Narendran, chief executive officer of Tata Steel, said during the signing of the contract.
“Technology like the furnaces made by Tenova is critical to decarbonizing the industry, unlocking its potential to provide skilled jobs and creating economic stability for future generations of steelworkers in South Wales,” Jonathan Reynolds, UK Business and Trade Secretary, said.
UK steel sector will face increased demand for scrap
Tata Steel’s new EAF will recycle 2 million-2.5 million tonnes of UK-sourced scrap every year — equivalent to about 2.5 million cars or 250 Eiffel Towers, the company said.
Using predominantly UK-produced scrap means that the company would need to buy high-quality scrap grades with lower impurities that are suitable for flat steel production.
The UK is a net scrap exporter, but with new EAF-based steelmaking capacities coming online, it could become an importer of certain grades, sources suggested.
Another UK steel producer, British Steel also plans to switch to EAF by 2025.
New decoiling line for Tata Steel plant in Maastricht
Tata Steel Nederland announces the inauguration of a new decoiling line at its Feijen steel service centre location in Maastricht.
This is the largest investment ever made by Feijen, involving a sum of 20 million euros. With the state-of-the-art processing line, Tata Steel Nederland can deliver faster and higher quality steel to its customers in the machine building and industry sectors.
The new line involves a so-called decoiler and an automated sheet packaging line at the Feijen location in Maastricht. Hot-rolled steel coils from Tata Steel in IJmuiden are processed into steel sheets. In close corporation with the IJmuiden steel mill colleagues, Feijen focusses on customers in Europe as well as in other parts of the world. These customers are active in markets such as agricultural and earthmoving machinery, trailers, cranes, and shipbuilding.
Tata Steel Nederland consists of two business units: Business Unit Tata Steel IJmuiden (TSIJ) and Business Unit Tata Steel Downstream Europe (TSDE). Service Centre Maastricht is part of TSDE and consists of two locations: Multisteel and Feijen. Multisteel processes steel coils in the thinner segment, such as cold-rolled and galvanized steel. Feijen processes hot-rolled steel coils. Both sites predominantly process steel coils from TSIJ. Some major end customers supplied from Maastricht include JCB, John Deere, CNH, and Volvo Construction Equipment.
In line with Tata Steel Nederland’s broader vision of sustainability, Service Centre Maastricht announces today its carbon neutrality for Scope 1 and 2 emissions. This initiative underscores Tata Steel Nederland’s commitment to reducing its environmental footprint and aligns with its long-term strategy of achieving carbon neutrality across its Downstream operations. Scope 1 concerns direct CO2 emissions caused by sources within the organization itself. Scope 2 concerns indirect emissions created by the production of the electricity or heat that an organization buys.
Downstream Europe processes steel from IJmuiden for high-grade applications in specific market segments, such as construction (metal roofs and wall cladding), the mobility sector and the energy sector (batteries). With 19 production sites in ten countries, TSDE supplies to customers located mainly in Europe and partly in the United States. TSDE is divided into five business units: Building Systems, Colors, Distribution, Plating and Tubes.
Read more: tatasteelnederland.com
EU HRC market gears up for mill consolidation
The European hot-rolled coil (HRC) market is gearing up for potential consolidation over the coming year, as mills grapple with tough market conditions.
The share prices of key European producers have rallied in recent days, despite continued weakness in HRC prices. Global steelmaker ArcelorMittal’s shares traded above €22/share ($24/share) on the Luxembourg Stock Exchange at 12:30 GMT today, up from €19.70/share on 10 September. This strength is partly attributable to the expected release of economic stimulus measures in China, and the US Federal Reserve’s recent interest rate cut, sources suggest. But market strength could also be because of growing talk that a new wave of consolidation is on its way, fuelled by decarbonisation efforts and the strained positions’ of some mills.
There has long been talk that steel coil producer Tata Steel Netherlands could be sold, after the Dutch state agreed to contribute to its decarbonisation spend. Recent difficulties at Germany’s ThyssenKrupp have also sparked suggestions it could be an acquisition target. Czech Republic energy company EP Corporate Group (EPCG) recently completed its purchase of a 20pc stake in ThyssenKrupp’s Steel Europe division, and could increase this to 50pc in the near future. EPCG owner Daniel Kretinsky may be seeking a strategic partner to help run the business, sparking talks that other mills could bid for a stake in the company.
ThyssenKrupp shares were trading at €3.20/share on Deutsche Borse Xetra at 12:30 GMT today, up from €2.78/share on 10 September.
Concerns over strong positions in niche markets, particularly tin plate, saw Tata Steel and Thyssekrupp call off their proposed joint venture in May 2019. But the market is in a different position now. Some mills have reduced capacity but new entrants are trying to join the market as green producers. And the global market is oversupplied, putting European producers in a difficult financial predicament, especially given their capital-intensive efforts to decarbonise. In the case of ThyssenKrupp, expectations that the mill will reduce its production footprint could partially alleviate potential competition concerns in the event of a takeover.
Tata UK could seek recycling company acquisition
Tata Steel UK could weigh up acquiring a recycling company to ensure supply of scrap for its planned transition to an electric arc furnace, Kallanish notes.
Two sources from large UK scrap companies tell Kallanish that Tata Steel had been reviewing potential acquisition opportunities within the last 12 months, reportedly making a bid for at least one UK facility, which was not successful. The steelmaker was not available for comment on this before Thursday deadline.
However, when asked during the UK Metals Expo on Thursday about the potential for securing its own scrap processor, Tata Steel UK head of public relations Tim Rutter said: “I think if you were an MBA student, doing a project about the steel industry and moving towards electric arc furnace steelmaking, you’d list a number of options.”
“You can continue a relationship with your scrap suppliers as a customer … you can work collaboratively as we are already doing as part of our collaboration with Swansea University on segregation, or buy scrap supply and become vertically integrated,” he told Kallanish at the event in Birmingham.
Rutter noted during an earlier panel: “There is clearly an emerging trend in the industry, which is collaboration, between private industry, government, academia [and] research institutes where people, more than I ever remember in my career, are working hand in hand for the common good.”
“Watch this space” he added.
One of the market sources views the steelmaker buying a recycling company as a move with no downside. “They should, and I think they will,” they tell Kallanish. “They’re spending their money opening an EAF, and they need scrap to feed it.”
“For Tata, there is no downside. It’s security of supply, at the end of the day,” the source adds, noting that another UK steelmaker, Celsa, had recently opened its own recycling facility with a material shredder.
“Tata Steel have certain expertise in house, and they already understand what quality they’re after. They either collaborate with recycling companies to get that blend, or buy a recycling company to get it,” the source continues.
The UK exports around 10 million tonnes/year of ferrous scrap, while domestically, the feedstock has become more challenging to secure, according to market sources, even before Tata switches to EAF steelmaking from 2027. This will see the firm’s scrap requirement rise to 2-2.5m t/y.
“There’s a lot less [scrap] available now, the supply of material is a lot harder. There is less demolition from construction and macroeconomic factors, with less [consumer] spend on cars, etc,” the market source adds.
They also note the volatility in scrap markets, with peaks and troughs becoming more frequent, which can be hard to navigate for buyers and sellers.
A second market source believes Tata Steel is underestimating the challenges involved with sourcing such a volume of scrap from the market or acquiring its own recycling company.
“It’s a very steep investment and a serious amount of capital investment to change the grading [of the scrap for an EAF],” the source says. Some scrap grades can have higher residual copper levels which would need managing, as well as needing to segregate chrome from other grades, they add.
“Tata will have to pay more money for the scrap as they’re asking the yards to do more work,” they note. “Naturally, you go towards shredders, but there’s not the volume coming out of the shredders in the UK today for what they need. With Celsa competing for material, the price of the shredder feed is going to have to go up.”
The second source explains that some facilities would not be good acquisition targets due to logistical limitations, with 2mt of scrap unlikely to be transported by road, while other facilities may not have the machinery needed such as shredders.
A shredder could cost £12 million ($15.7m), in addition to the acres of land needed for segregation and sorting the material, plus staff and engineers for maintenance and repairs, the source concludes.
Carrie Bone UK
Tata partners with Czech service centre for decarbonisation
Tata Steel Nederland says it has signed a memorandum of understanding on decarbonisation with Czech steel service centre Steel Center Europe.
Steel Center Europe is a coil processing service centre equally owned by Japan’s Sumitomo Corporation and Spain’s Bamesa. It was established in 2004 by Sumitomo and Toyota Tsusho. Bamesa became co-owner in 2020.
The steelmaker announced the partnership on its LinkedIn account but did not specify what it entails. The note refers to Zeremis, Tata Europe’s emissions-reduced steel brand, which suggests the partnership is about Tata supplying Zeremis to the Czech firm, Kallanish notes.
“To support the green journey of all European mills, a separate department has been established within the Sumitomo Group, demonstrating their strong commitment to sustainability,” the note adds.
Christian Koehl Germany
UK to provide £13.5 mln to support supply chain while Tata Steel transitions to green steelmaking at Port Talbot
The government said the funding was for “immediate release” to support those local businesses that rely on Port Talbot steelworks by helping them turn toward new markets and customers. Details of exactly how to access the funds will be announced soon, the government added.
The money is the first tranche from the Tata Steel/Port Talbot Transition Board fund – a dedicated fund of £100 million to be invested in skills and regeneration programs to support workers directly and indirectly affected by Tata Steel’s plans for Port Talbot. The funding will help them to find new jobs where relevant, provide access to skills training and enable them to gain new qualifications.
Tata Steel Europe’s decarbonization plan for the Port Talbot steelworks includes the construction of a new 3.2 million tpy electric-arc furnace, with the total amount of the investment reaching £1.25 billion, including financial support from the UK government.
The decarbonization plan also includes the gradual closure of the two remaining blast furnaces at the Port Talbot steelworks. BF5 was closed on July 4 and BF4 will be closed by the end of September.
Tata Steel Europe said that it would provide £20 million of the total transition fund, while £80 million will come from the UK government.
A spokesman for Tata Steel Europe told Fastmarkets the company has already started spending some of its £20 million contribution on an employee support scheme – to help workers get formal accreditation for their skills by gaining National Vocational Qualifications (NVQs) and that it will soon appoint an outplacement support agency.
More than 50 companies, including Fintech Wales, The Royal Mint, Cardiff Metropolitan University, RWE Energy, Ledwood Mechanical Engineering, and Pro Steel Engineering, have committed to supporting workers forced to leave their jobs in the steelworks. According to the UK government, support includes guaranteed interviews for anyone made redundant, training and coaching.
On August 1, TV Narendran, chief executive officer of India-headquartered parent company Tata Steel, confirmed the company’s intention to continue with its decarbonization plans for The Port Talbot steelworks.
“In the UK, we have safely ceased operations at one of the blast furnaces (BF5) at Port Talbot and are on track to close the remaining blast furnace by September 2024,” he said at the time.
And a Tata Steel Europe spokesman said that no hot metal will be produced at the site until the new EAF is up and running in 2028.
On August 15, the UK government’s Welsh Secretary, Jo Stevens, chaired the second meeting of the Tata Steel/Port Talbot Transition Board and said that, despite Tata Steel’s management being firm about its schedule for decommissioning, “negotiations with Tata Steel on the future of the site will continue.”
The UK Business & Trade Secretary, Jonathan Reynolds, said: “We’re working in partnership with trade unions and industry to secure a green steel transition that’s right for the economy, [for] our talented workforce and [for] local communities for generations to come.
“Our negotiations with Tata [Steel] remain ongoing.” he added.
And Tata Steel UK’s CEO Rajesh Nair, said: “The transition board [has a] very important role [to play] in supporting the transformation of our business to low-CO2 steelmaking and [in] encouraging regeneration and inward investment to the area, while [at the same time] helping to mitigate the impact those changes may have on our people, our supply chain and our communities.”
Pressure on UK HRC prices
The Port Talbot steelworks produces hot-rolled coil and, according to Tata Steel, the annual output of the new EAF will be equivalent to the combined output of the last two blast furnaces.
But the previous closures and the fact that no steel will be produced at the site from September “has led to an increase in imports consistently exhausting part of the quota for Category 1 steel [which includes hot rolled flat steel products] across four consecutive quarters,” according to the UK Trade Remedy Authority (TRA).
“This in turn has driven up the cost of these products for the UK market,” the TRA said.
To remedy this, the TRA, announced on August 9, that the import quota for flat steel products will be almost tripled due to the “changed circumstances” in the market, with particular reference to the blast furnace shutdowns at Port Talbot.
The current quota of 1 million tonnes per year for Category 1 steel, will be expanded to 2.9 million tpy, by dividing Category 1 into two subcategories – 1A and 1B – to reflect whether the interested parties want to import material for commercial applications (1A) or for downstream processing (1B).
The quota Category 1A – which covers the steel commonly used as a raw material for other types of steel – will be set at 1 million tpy.
The quota for Category 1B – steel that has been subject to further downstream processing – will be set at 1.9 million tpy.
The TRA said that if limits are breached, importers will need to pay a 25% tariff.
UK TRA proposes increasing HRC import quota citing Tata Steel UK production drop
The UK Trade Remedies Authority has proposed an increase to the import quota for hot-rolled flat products as changes in circumstance, including the recent closure of a blast furnace at Tata Steel UK’s Port Talbot works, have decreased domestic production of these products, it said Aug. 9.
Under the proposal, the current quota volumes for steel used for commercial applications will be maintained, while the TRA would create a new quota accessible for downstream processing, it said.
The TRA has proposed that the category for hot-rolled flat products, known as Category 1, be split into two segments, Categories 1A and 1B. The quota for Category 1A, which would be accessible by parties looking to import the products for commercial applications will be retained at current levels, or just over 1 million metric tons/year.
The quota for Category 1B, which would be accessible solely for downstream processing, however, will be set 89% higher than that of Category 1A, to around 1.9 million mt annually. This means the total Category 1 category for hot-rolled flat products will be increased to 2.9 million mt.
The TRA also has proposed for the Category 1B quota to be allocated on a global basis “to allow companies to establish reliable supply chains for domestic processing,” along with a cap in the range of 37%-42% to ensure the quota is not dominated by a single country.
“Our proposal today is designed to deal with the reduction in production of hot-rolled flat steel at Port Talbot,” the TRA said. “These changes have resulted in higher imports and parts of the current quota being exhausted, creating uncertainty and driving up costs for steel users.”
Tata Steel is the UK’s sole HRC producer.
Platts, part of S&P Global Commodity Insights, last assessed UK HRC at GBP575/mt basis DDP West Midlands Aug. 8.
Justine Coyne
Tata Netherlands profitability improves, UK sees stock buildup
Tata Steel Netherlands reported dramatically improved profitability in the June quarter, despite higher raw material cost, while production and deliveries also rose, Kallanish notes.
Deliveries rose 7% on-year and 3% on-quarter to 1.47 million tonnes after the reline of BF6 was completed. Liquid steel output rose 80% from a year earlier and was up 14% on the March quarter to 1.69mt.
Revenue fell 6% from a year earlier but rose 2% on-quarter to INR 14,167 crores ($1.69 billion), while raw material cost was higher on increased coking coal and iron ore consumption cost. Change in inventories was negative on stock build-up during the quarter.
Ebitda was nevertheless at positive INR 453 crores versus losses each a year and quarter earlier, thanks to the stabilisation of operations.
EU steel spot spreads witnessed a decline exceeding 10% during the quarter, Tata Steel says in a presentation. EU steel demand was subdued, with construction and machinery being adversely impacted by high interest rates. Steel imports remained high and led to the European Commission extending safeguards with additional measures.
At Tata Steel UK, deliveries and profitability declined in the June quarter, while raw material cost increased significantly.
Deliveries fell 9% on-year and were flat on-quarter at 680,000t, while liquid steel production slumped 20% from the previous year to 680,000t, but this was up 3% on-quarter.
Revenue fell 12% on-year and was flat on-quarter at INR 6,810 crores ($813 million), while raw material cost surged over 30% in each case due to increased purchases of finished and semi-finished goods. The decline in change in inventories deepened. Ebitda loss more than doubled on-year and on-quarter to INR 955 crores.
Given the planned closure of blast furnaces in the UK, there was a steel stock build-up for the downstream operations which impacted working capital, says Tata Steel chief financial officer Koushik Chatterjee. “We are proceeding as per previously announced timelines for the closure of the [Port Talbot] heavy end,” he adds. “We are working closely with the recently elected UK government on finalisation of grant funding process for the new electric arc furnace project.”
Tata closed blast furnace no.5 at Port Talbot in early July and plans to close BF4 by end-September.
Adam Smith Poland
Tata Steel Nederland adds sampling line
Tata Steel Nederland has expanded its hot strip mill in IJmuiden with a sampling line, Kallanish has learned. The line enables rapid testing of steel properties, as well as the inspection and certification of each steel coil.
According to the company, this shortens lead times in both the development of new steel grades and the delivery of steel to customers. The expansion is the latest in a series of investments and strengthens the company’s position in the market for thicker, stronger and more abrasion-resistant steel, Tata notes.
“Tata Steel is one of the best steel producers in the world, and thanks to our investment programme, we continue to play in the Champions League of the steel industry,” said Tom Eussen, member of the Board of Management of Tata Steel Nederland and Managing Director of Tata Steel IJmuiden. “The new sampling line is a significant investment that allows us to assess the quality of our steel more quickly and deliver to our customers faster.”
“Investments like these enable us to develop new steel grades, such as abrasion-resistant steel, ultra-high-strength steel and linepipe steel,” Eussen continued. “Combined with the opportunity for customers to reduce their scope 3 emissions through Zeremis Carbon Lite and Zeremis Delivered, we continue to strengthen our position in a highly competitive steel market.”
These steels are is used in applications such as trucks and trailers, excavators, cranes, mining, and in pipelines for transporting gas, water and hydrogen.
The sampling line can automatically sample the entire production spectrum, from normal to ultra-high-strength steel, with steel thicknesses of up to 25 millimetres that can be cut. Samples are taken hot, and the capacity of the number of coils that can be sampled has thus substantially increased, Tata says.
Christian Koehl Germany