The Chinese dumping cheap steel in India has become an old story. The Indian steelmakers are now riding on the boom in domestic demand. T.V. Narendran, managing director and chief executive officer, Tata Steel told Fortune India. “The steel industry is currently in a much better place than it has been in the last 10 to 15 years because the demand side is positive and on the supply side the discipline in China,” he added.

“The oversupply saturation that was plaguing the industry is less of an issue,” Narendran said. The steelmaker expects demand for the commodity to stay strong for a sustained period as the global economy recovers from the pandemic. This could well be another super-cycle for the commodities sector globally, thanks to rising demand in China and the U.S.

Tata Steel has earmarked ₹11,000 crore for capital expenditure this financial year, said Narendran. Of this, the company will spend around ₹8,000 crore in India. In the April-June quarter, it spent ₹2,000 crore on capex largely for the work on the pellet plant, cold roll mill complex and the five million tonne crude steel capacity expansion at Kalinganagar. Tata Steel targets to attain and retain market leadership in chosen segments by building customer relationships, distribution network, rolling out brands, and developing new products and solutions in steel and new materials.

The steelmaker is also in the process of turning its European business profitable in this financial year—cashing in on the rising demand in Europe. “Our focus is on the performance in Europe. We are separating the business into Tata Steel Netherlands and Tata Steel U.K. This also helps us break ground on cost efficiencies and management focus; the European business in this year will be cash and PAT positive. So, it will be a strong year for European business also,” said Narendran.

Tata Steel has allocated $400 million (around ₹3,000 crore) capex for its business in Europe in this financial year. “This capex will be utilised for sustenance capex, environment-related capex and capex on the product mix enhancements that we are doing particularly in the Netherlands,” said Narendran.

The steel downturn started in 2013-14 when China started dumping steel across the world, which rattled the business of Tata Steel—especially in Europe. Tata Steel Europe has mostly been a loss-making unit in the last 10 years and the management mulled exiting the business at various points. Tata Steel Europe also unsuccessfully tried to merge its business with thyssenkrupp and later with SSAB.

The steel companies in India had also been impacted by the Chinese dumping. The government had brought in restrictions to prevent dumping. But the steel supercycle has completely changed the scene and turned Indian steelmakers predatory. During the time of the first cycle of pandemic and lockdown, Indian steelmakers—including JSW Steel, Jindal Steel and Power, and Tata Steel—exported steel to China as the demand was robust there and the production was low. The steel output in the country was 99.6 million tonnes in 2020 and the capacity utilisation was 70%.

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