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Tata Steel Ltd., India’s biggest producer, is seeking alternative sources for coal supply to its European and Indian operations due to difficulties of doing business with Russia after its invasion of Ukraine, a top official said Saturday.
The geopolitical crisis after Russia’s invasion of Ukraine has spurred fears of supply disruptions and surging costs of commodities from aluminum to coal and iron ore.
Tata Steel will look at alternative markets for coal imports as transactions with Russian suppliers and bankers at present comes with a “lot of uncertainties," Managing Director T.V. Narendran, told reporters on the sidelines of an event in Kolkata. The company used to buy upto 15% of its coal requirements from Russia, he said.
“For Europe, we have to buy more from North America," he said, adding that India usually buys coal from Australia.
The supply vacuum left by Russia and Ukraine also opens up export opportunities for Indian steel producers, particularly to countries like Turkey and Europe, he said. But Tata Steel’s Indian business will stick to exporting about 10%-15% of its sales in the next financial year starting April, he said.
“We want to focus on best prices when selling that 10%-15%, so southern Europe is now a better option than South East Asia, “ he said.
The company’s margins should improve in the immediate future, because the price increases are more than input costs and there may be scope for further hikes, Narendran said.
“In the next couple of months, the cost increases will start hitting everyone. So I think to the extent you have inventory in the system you have advantage for a couple of months. But otherwise it will catch up," Narendran said.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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