India’s Tata Steel, a major employer in Yorkshire, posted an unexpected quarterly loss, its first in more than two years, as higher raw material costs and weak demand in Europe hurt margins.
The company, which operates two-thirds of its global capacity of about 28 million tonnes in Europe, warned it did not expect a significant revival in demand in its core markets in 2012.
“The December quarter marked the height of the cyclical cost-price squeeze,” said Karl-Ulrich Kohler, head of its European operations.
“We are accelerating cash conservation in expectation of muted but stable demand in our core markets in 2012,” he said.
Global crude steel production hit a record high of 1.53 billion tonnes in 2011, but the pace of growth was sharply lower than the previous year as the sovereign debt crisis in Europe and slowing economic growth in top consumer China dented demand.
Global steel output rose 6.8 per cent in 2011, down from a 15 per cent growth in 2010, according to the World Steel Association.
Earlier this month ArcelorMittal also posted a quarterly net loss.