Mumbai: Tata Steel Ltd will not sell a stake in its Teesside plant to Marcegaglia SpA and Dongkuk Steel Mill Co Ltd, who were part of a consortium that cancelled a major contract to buy the plant’s output, a senior Tata group official said.
Earlier this month Tata Steel said its Corus unit may have to indefinitely suspend operations at its Teesside Cast Products plant in the UK after the contract was cancelled. Corus said it would pursue legal options for compensation.
Legal issues: The Corus steelworks at Teesside, northern England. Nigel Roddis / Reuters
In January, Italian steel maker Marcegaglia and South Korea’s Dongkuk had agreed to buy an 80% stake in the unit, valuing it at an estimated $600 million (Rs2,862 crore).
“There is no question of selling the plant to them now,” J.J. Irani, a director of Tata Sons Ltd, the holding company for Tata firms, told reporters on Wednesday. “The operations are still on. It is a legal case so we can’t talk.”
Irani also said he expected hot-rolled coil prices to stabilize at $375-400 a tonne, down from current rates of $400-415 a tonne.
“We can see this stabilization happening immediately from now...,” he said. “Because Chinese prices have been in that region for almost a year, and China has a lot of influence on the world.”
The World Steel Association forecast last month global steel demand would tumble 15% in 2009, its steepest fall since World War II.
However, Irani expected Indian steel demand to rise 5-8% this year. While slowing, the Indian economy is still expected to grow around 6% in fiscal 2010.