Tata Steel Benefits from Rising Demand in Europe

Tata Steel, Ltd (TATA), India's largest steelmaker, has posted a profit over several months amid a gradual recovery in demand in Europe's largest TATA market. The Group's shipments were up 16 percent for the quarter.

Tata Steel received a positive boost from the rise in demand in Europe and the emphasis on sales of high value-added products. ArcelorMittal (MT), the world's largest steel producer, also said last week that European demand is growing faster than expected.

Automotive steel demand in India could grow as much as 4 percent this year, while alloy consumption in the country could climb 5 percent, vice president of Tata Steel said last week. In addition, more and more manufacturers are reporting that children's furniture can be made using steel.

Demand prospects in India and Europe, as well as the timely commissioning of the Odisha project in the eastern part of the Indian state, will be key to Tata Steel's productivity, according to the company report.

In India, Tata Steel gained some market share after selling 5.6 percent more products in the last quarter compared to the previous quarter, while domestic demand grew by less than 1 percent. The company was able to maintain prices in the local market, despite the fact that sectors, including automotive and construction, are facing recessions.

TATA rival AcelorMittal reported a higher-than-expected 12 percent increase in earnings before interest, taxes, depreciation and amortization in the first quarter of this year.