INDIA’S Tata Steel forecast yesterday its European subsidiary Corus would be operating at 100 per cent capacity by the end of this financial year thanks to a revival in global demand.
The forecast by a senior official of Tata Steel, the world’s eight-largest steelmaker, comes as other global steel producers have said they too see better times for the market.
“Demand is coming back in the West,” Tata Steel vice-chairman B. Muthuraman told reporters in New Delhi.
“In October, capacity utilisation touched 80 per cent. It should be 85 per cent by the end of November and 100 per cent by the end of this financial year” in March 2010, he said.
Corus produces about 20 million tonnes of steel a year.
Tata Steel, part of India’s giant tea-to-outsourcing Tata Group, bought Corus in 2007 for $13.7bn (£8.2bn).
Since then, Corus, spawned by the 1999 merger of Dutch firm Hoogovens and British Steel, has been buffeted by sharp declines in international steel prices.
Last year, Corus cut production capacity at its mills by up to 50 per cent as the global steel industry was hit by a collapse in orders from the auto and construction sectors.
ArcelorMittal, the world’s largest steelmaker, has restored capacity utilisation of its mills to about 61 per cent in the past three months and aims to reach 70 per cent in the current financial quarter.
But ArcelorMittal has also warned against possible overproduction by Chinese steel mills that it says could mean South Asian and other markets will face an influx of cheap steel goods.
But Corus’s Muthuraman said the production by Chinese steel mills was only meant to feed the country’s domestic market and that there was no threat of dumping of cheap steel items.
“Chinese steel production will meet its internal demand, which is high,” he said.
