Tata Steel is looking for an alternative to Russian coal

Tata Steel Ltd is exploring alternative markets for coal imports as it faces uncertainties with its Russian suppliers and bankers amid the Russia-Ukraine dispute, a company official said on Saturday.

The geopolitical situation following Russia’s invasion of Ukraine has also opened up steel export opportunities in Europe, following a 45 million ton metal supply void left by Russia and Ukraine. on the mainland, said Tata Steel managing director TV Narendran.

Tata Steel will explore alternative markets for coal imports to reduce risk. There are a lot of uncertainties with Russian suppliers and bankers at the moment, Narendran said on the sidelines of CII’s Eastern Region annual meeting here.

The steelmaker was buying 10-15% of its coal needs from Russia for pulverized coal injection, he said. Pulverized coal injection (PCI) is a process of injecting large volumes of fine coal particles into a blast furnace. “For our operations in Europe, we need to buy more from North America and India buys coal mainly from Australia,” he said.

The 45 million tonne supply gap left by Russia and Ukraine has also opened up export opportunities for Indian steel producers, pushing up spot prices by 1,000 euros, Narendran said. Tata Steel will consider exporting more to southern Europe, compared to Asian markets, from India for better margins, he said. Tata Steel Europe’s exports could exceed one million tonnes in the 2022-23 financial year, while Indian operations could ship around 15% of its output, the official said.

The geopolitical crisis has boosted input costs, but in the short term with its inventory, the company’s margins will improve as rising prices outpace rising raw material costs, Narendran said. If the conflict drags on for the next two months, rising costs will start to hit everyone, he added.


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