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Informist, Thursday, Jul. 2, 2026

 

By Astha Oriel and Sagar Sen

 

NEW DELHI – Tata Steel Ltd.'s Ferro Alloys and Mineral Division exports more than 50% of its production to the European Union and the US, but not to its own mills in the UK and the Netherlands, a senior company official told Informist Wednesday. In Europe, the company operates through the Tata Steel IJmuiden plant in the Netherlands and the Tata Steel Port Talbot plant in the UK.

 

The executive said that roughly 60% of the ferro alloy unit's sales exposure is in Europe and the US, along with its long-standing business in Japan and South Korea. "Everything depends on the business case overall... Tata Steel (Europe) has a lot of other channels. But going forward, there will be some specific products which we are producing. Tata Steel Europe would be keen to take them because they are into very high-end products," the executive said, adding that this will happen once the division expands capacity. Notably, in the UK, the ferro alloy division's exports are relatively small and are currently limited to trial shipments, according to the executive.

 

The official pointed out that with demand for stainless steel increasing, most manganese alloy production will be directed towards the steel industry, with supplies intended for Tata Steel Europe. The ferro alloys division is not present in stainless steel but will get into very high-end specialty inputs, according to the official. "These (very high-end specialty inputs) are mostly imported. We will try and replace almost 80% of that import category," the executive said. 

 

A vertically integrated steel company usually controls the supply chain across its operations instead of outsourcing it. However, with the ferro alloy business operating independently of Tata Steel Europe and without any support from it, it is likely to be directly affected from the European Union's tariff-rate quotas on ferro alloys. 

 

The tariff-rate quota limits the volume of imports that can enter the EU duty-free, according to an official EU document. "Imports exceeding these quota volumes may enter duty-free if their price exceeds the established threshold. For imports priced below the established threshold, the applicable duty shall be equivalent to the difference between the net free-at-Union-frontier price and the established price threshold for each product type," the document said. 

 

The EU has also implemented the Carbon Border Adjustment Mechanism for the import of steel products. Carbon Border Adjustment Mechanism is the EU's tool to put a fair price on carbon emitted during the production of carbon-intensive goods entering the EU, and to encourage cleaner industrial production in non-EU countries. 

 

The executive flagged access to green power and limitations of existing technology as the main challenges for Carbon Border Adjustment Mechanism in Europe. Citing an example, the executive said that the ferro alloys division has not yet adopted agglomeration-free smelting (a technological upgrade) compared to some of its peers. "People are operating that (agglomeration free smelting) across the world. Technology established. Only that we (Ferro Alloys and Mineral Division) are struggling, we never got into that," the executive noted. 

 

Notably, while the EU's tightening of tariff-rate quotas and Carbon Border Adjustment Mechanism are likely to make things challenging for the ferro alloys division, Tata Steel Europe operations continue to struggle with the emission norms in the Netherlands. The company received a letter from the Netherlands' environmental agency and the local province in April informing the company of their intention to revoke the subsidiary's operating permits and trigger an early closure of the coke and gas plants. Tata Steel Netherlands proposed a timeline to the local authorities to ensure a controlled closure process. At its 119th annual general meeting, Chairman N. Chandrasekaran said that the operating environment in the Netherlands has become challenging with certain environmental regulations now exceeding European Union standards. "Emission norms have tightened to levels where, for some of Tata Steel Netherlands' legacy assets, viable solutions are not currently feasible within regulatorily accepted timelines," Chandrasekaran said. 

 

Brokerages had earlier said that the possibility of early closure of the coke and gas units of Tata Steel Netherlands was likely to affect the profitability of Tata Steel's European operations in the coming quarters. For the March quarter, liquid steel production from the company's Netherlands business was 1.63 million tonnes, while deliveries were 1.70 million tonnes.

 

For the March quarter, Tata Steel had reported consolidated net profit of INR 29.26 billion on revenue of INR 632.70 billion. On Thursday, the company's shares closed 1.4% higher at INR 187.67 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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