Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Tata Steel has reduced operations across sites amid the COVID-19 lockdown and weak demand for steel. In India and Europe, the company faced difficulties in selling finished goods as downstream consumers, mainly automobile manufacturers, have stopped production.


Tata Steel is working closely with the government agencies, customers and suppliers to sustain essential business operations while controlling the spread of COVID-19. The company has implemented work from home to reduce the presence of employees at workplace and enforced social distancing and hygiene norms at workplaces, according to the company’s update on the virus situation.


In India, the government has imposed a strict nation-wide 21-day shutdown of all non-essential services. Mines, steel and coal facilities are part of essential services in India, but local administrations are imposing strict measures to suppress the movement of people and goods at various state borders disrupting the movement of raw material and finished goods.


To adjust with COVID-19 restrictions, Tata Steel’s downstream operations are suspended and under care and maintenance mode, while its integrated steel plants at Jamshedpur, Kalinganagar Angul and Gamahria have cut production. The company’s mining operations are functioning at normal capacity.  


Tata Steel Long Products has suspended the production of sponge iron at Joda, Keonjhar District, Odisha. Crude steel production is cut by 50pc its plants with a reduction in upstream and downstream operations.


At Tata Steel BSL, cold rolling mill and operations at downstream units in Angul are suspended. Steel production at Angul is operating at significant low capacity. The company’s service centres in Sahibabad, Uttar Pradesh; Manesar, Haryana; Ludhiana, Punjab and in Maharashtra (Khopoli, Chakan and Aurangabad) are temporarily shut.


Despatches to customers have sharply reduced due to restriction on transportation and shutdown of production in the automotive, construction and other sectors.


In Europe, Tata Steel has reduced production at some mills to align with low steel demand in the region. All four blast furnaces of Tata Steel Europe are operating at reduced levels. Dispatch of shipments from Ijmuiden plant in the Netherlands and Port Talbot in Wales will continue at the revised levels. Steel demand in Europe has sharply reduced as many companies, including carmakers, have halted production. Tata Steel’s management is prepared to readjust production according to market conditions.


In the third quarter of fiscal 2020, Tata Steel reported a consolidated steel production of 6.99mn mt, up from 6.71mn mt in the prior year period, while deliveries were at 7.31mn mt. Tata Steel India produced 4.47mn mt steel, up from 4.38mn mt in the prior year period. India deliveries were at 4.85mn mt, up from 3.89mn mt in the prior year period. India deliveries contributed to more than 66pc of the company’s consolidated deliveries. 

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