Global Steel Industry Faces Profitability Challenges as India Sees Rising Demand

Global Steel Industry Faces Profitability Challenges as India Sees Rising Demand

Tata Steel CEO and Managing Director T.V. Narendran highlighted the significant challenges facing the global steel industry, citing shrinking profit margins due to aggressive pricing by China. In his address at a New Year gathering, Narendran explained how 2023 and 2024 were difficult years for steelmakers worldwide, as the industry struggled with reduced margins and the aftereffects of China’s COVID-19 restrictions. Narendran emphasized that while global geopolitical events have an indirect impact on India, the primary concern remains China’s economic slowdown, which has led to unfair competitive pricing. He urged the Indian government to adopt protective measures, similar to those in place in the US, Canada, and Europe, to safeguard domestic producers from the influx of cheaper steel imports.

Despite these global challenges, Narendran pointed to India’s steel demand, which is growing at a rate of 8 percent. Tata Steel has thrived in this environment, thanks to its competitive positioning and strong domestic market. However, he acknowledged the pressure on margins and stressed the importance of value addition and innovation within the sector to maintain profitability. He also emphasized the potential of India’s mineral-rich states such as Jharkhand, Odisha, and Chhattisgarh. These regions offer untapped opportunities for creating industries that can drive wealth and employment. Narendran called for further incentives to attract investment into these areas, noting that the steel sector in India already invests between ₹40,000 crore and ₹50,000 crore annually.

Among Tata Steel’s notable achievements, Narendran highlighted the commissioning of the country’s largest blast furnace at the Kalinganagar plant in Odisha, despite the challenging global environment. He also praised the company’s ongoing initiatives to improve employee and community welfare, such as the construction of housing and schools for staff and their families. Narendran also noted that Tata Steel is engaged in discussions with the new government in Jharkhand to explore ways to leverage the state’s vast reserves of iron ore and coal. He emphasized Jharkhand’s potential to become a hub for steel and automotive industries, supported by focused efforts on value addition and creating sustainable industries that benefit local communities.