Tata Steel Ltd is looking at alternative markets for imports of coal as it faces uncertainties with its Russian suppliers and bankers, amid the Russia-Ukraine conflict, a company official said on Saturday.
The geopolitical situation after Russia’s invasion of Ukraine has also opened up steel export opportunities in Europe, following a supply vacuum of 45 million tonne of the metal left by Russia and Ukraine in the continent, Tata Steel Managing Director T V Narendran said.
“Tata Steel will look at alternative markets for coal imports to de-risk. There is a lot of uncertainties with Russian suppliers and bankers at present,” Narendran said on the sidelines of CII eastern region’s annual meeting here.
The steelmaker used to buy 10-15 per cent of its coal requirements from Russia for use in pulverised coal injection, he said.
Pulverised coal injection (PCI) is a process that involves injecting large volumes of fine coal particles into a blast furnace.
“For our Europe operations, we have to buy more from North America and India buys coal mostly from Australia,” he said.
The 45-million tonne supply vacuum left by Russia and Ukraine also opened up export opportunities for Indian steel producers, resulting in spot prices going up by EUR 1,000, Narendran said.
Tata Steel will look at exporting more to southern Europe, as compared to Asian markets, from India for better margins, he said.
Exports from Tata Steel Europe could cross one million tonne in 2022-23 fiscal, while Indian operations could ship out around 15 per cent of its output, the official indicated.
The geopolitical crisis has spurred input costs but in the short run with its inventory, the company’s margins will improve as the price increase is higher than the rise of raw material costs, Narendran said.
If the conflict prolongs for the next couple of months, the increase in cost will start hitting everyone, he added.