Tata Steel expects its UK business to take another 12 months to break even, as rising costs driven by the West Asia war may offset gains from recovering steel prices and policy support aimed at reviving its loss-making operations in the UK, chief executive TV Narendran told Mint.
This is the second time India’s second-largest steelmaker has revised its Ebitda breakeven guidance. It had originally targeted September 2025 and later deferred it to March 2026.
“We had previously said that if steel prices go up by about 100 pounds, it will break even… It is already up by about 100 pounds now… But costs have also gone up. So I don’t want to say the price point at which we will break even. But we will break even this fiscal year,” Narendran said on the sidelines of an All India Management Association conference in New Delhi on Thursday.
The comments underscore Tata Steel’s delicate balancing act in the UK, where it has struggled with structurally higher costs, including energy and logistics, even as market conditions begin to improve.
Tata Steel's confidence is buoyed by import restrictions that the UK government has announced to support domestic steel production. The company had long flagged the need for regulatory backing to make its UK business viable and shield it from cheap imports, particularly as it transitioned towards greener steelmaking technologies.
In March, the UK government said starting 1 July 2026, it will slash steel import quotas by 60% relative to current safeguard levels. Any steel entering the country beyond these new limits will be hit with a 50% tariff. “This measure will apply to imported steel products that can be made in the UK,” Peter Kyle, secretary of state for the department of business and trade, said in a statement on 19 March.
UK business drags
While Tata Steel’s Netherlands operations have remained profitable, the UK unit has been a persistent drag on overall European performance. The planned shift towards electric arc furnaces and greener production methods is expected to gradually improve cost efficiency.
Tata Steel UK contributes almost 10% to the steelmaker's total revenue from operations. It has been importing steel substrate (slabs and hot-rolled coils) to feed its UK downstream operations following the closure of Port Talbot blast furnaces in 2024 as part of the shift toward greener steelmaking. For the first nine months of the fiscal year, the business reported an Ebitda loss of £170 million.
For Narendran, who took over as chief executive in 2017, the business increasingly reflects a tale of two geographies, with India delivering record performance and the UK continuing to drag consolidated earnings. In FY26, India operations posted a best-ever crude steel output of 23.48 million tonnes and deliveries of 22.53 million tonnes, with domestic volumes crossing 20 million tonnes for the first time. In contrast, the UK business remained subdued, with deliveries declining to 2.21 million tonnes amid weak market conditions and the ongoing transition.
Narendran highlighted that while Indian steel consumption continues to grow at a robust 8-10%, the company’s profit margins are being squeezed by the surging costs of shipping, insurance, and raw materials. With steel prices trending upward since late last year, Tata Steel believes the worst may be behind it, setting the stage for a breakeven in the UK business by FY27.
However, the lack of clarity on the exact breakeven price point reflects the ongoing volatility in input costs, suggesting that Tata Steel’s turnaround in the UK will depend as much on cost control as on sustained price recovery.
In March, the board approved an equity infusion of up to $2 billion (around ₹18,500 crore) into T Steel Holdings Pte. Ltd, its Singapore-based holding arm for international operations. The funds will be deployed in tranches to support overseas subsidiaries through capital expenditure, restructuring costs, and debt repayment.
Tata Steel entered Europe through its $12 billion acquisition of Corus Steel in 2007, which included the Port Talbot plant and operations in the Netherlands. In 2024, the company received a £500 million grant from the UK government as part of a £1.25 billion for a 3 MTPA green steel project at Port Talbot.