Tata Steel, the world?s eight-largest steel manufacturer, is pessimistic on demand picking up in Europe.
The company?s European operations remained under utilised and unprofitable last fiscal.
In its 103rd annual report the firm said the underlying demand in Europe was still fragile. Consumption levels are not expected to reach pre-recession levels before 2012.
European steel demand declined 24% in 2009-10. In the second half of 2009-10, demand started to stabilise and the rate of de-stocking started to moderate.
?Continental Europe is seeing a much more modest sign of economic revival with some concerns about its sustainability. However, in the UK, a recovery is yet to take place,? said Ratan Tata, chairman of the company adding that in the developed world, definite signs of recovery are currently witnessed in the US.
Alluding to the recently mothballed Teessides Cast Product (TCP) mills of Corus, its European arm, Ratan Tata said some of the decisions in the last year have been hard for the company and some actions have been painful, however, they were necessary for the overall enterprise in the UK and Europe to survive.
Tata Steel Europe, which contributes about 75% to the company’s total top line growth saw its capacity utilisation falling to as low as 53% in the fist quarter of 2009-10.
Its Teesside facility witnessed unilateral termination of 10 year off take agreement for slabs.
Without disclosing any time frame, Tata said the company aimed to be a 40-50 million tonne company with presence in Asia, UK and Continental Europe.
Expressing concern on the monopoly of raw material suppliers, the chairman said major iron ore and coking coal resources have continued to be controlled by three companies, which continue to opportunistically increase prices. The inflated prices can can never be passed on to the customers in these depressed times.