India's Tata Steel reports third-quarter loss due to lower demand

India's Tata Steel on Monday reported a quarterly profit loss from a year ago, caused by a sharp drop in global steel prices and lower demand amid fears of a likely slowdown in economic growth.

Consolidated losses of the steel plant for the three months to December 31 amounted to 25.02 billion Indian rupees (302.71 million dollars) against a profit of 95.98 billion rupees a year earlier. Total operating revenue fell 6.1% to Rs 570.84 billion.

“Fear of a recession has weighed on steel prices, which, combined with higher energy costs, has weighed on our performance,” the CEO of TV Narendran said in a statement.

While India's steel prices were weak, margins were squeezed at European operations due to lower sales and higher costs, the company said.

Total costs rose by 27% to Rs 277.49 billion and production costs rose by 27.2%.

“Looking ahead, we see visible increases in steel prices in key regions thanks to improved demand prospects in China and robust infrastructure spending in India,” Narendran said.

Exports for Indian steel producers fell after the government's decision to impose an export duty on some steel brokers in May.

The sharp drop forced the government to lift the export duty in November, but steel companies complained about losing share in traditional markets, including Europe.

The export duty weighed on the performance of rival steelmakers, with Jindal Steel and Power reporting a nearly 68% drop in quarterly profits, while JSW Steel Ltd's profit fell 89%.