India's Tata Steel will not sell a stake in its Teesside plant to Marcegaglia and Dongkuk Steel, 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 England after the contract was cancelled.
Corus said it would pursue legal options for compensation. In January, Italian steelmaker Marcegaglia and South Korea's Dongkuk had agreed to buy an 80 percent stake in the unit, valuing it at an estimated $600 million. "There is no question of selling the plant to them now," J.J. Irani, a director of Tata Sons, the holding company for all Tata firms, told reporters at a steel conference 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 stabilise at $375 to $400 a tonne, down from current rates of $400 to $415 a tonne. "We can see this stabilisation happening immediately from now till the year," 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 percent in 2009, its steepest fall since World War II. However, Irani expected Indian steel demand to rise 5-8 percent this year. While slowing, the Indian economy is still expected to grow around 6 percent in the fiscal year ending March 2010. At 0634 GMT, Tata Steel shares were up 11.7 percent at 367.60 rupees, their highest in more than seven months.
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