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West Asia Conflict Drives Up Steel Costs, Says Tata Steel MD

Tata Steel Managing Director TV Narendran states that the ongoing conflict in West Asia is escalating costs for the steel industry through higher freight and insurance rates. Supply constraints for fuels like LPG and LNG are further adding to the financial pressure. While production remains unaffected, downstream customers such as fabrication units are beginning to struggle with these increased costs. Separately, Narendran mentioned industry discussions with the Odisha government on a long-term plan to significantly expand the state's steel production capacity.

Key Points: West Asia Conflict Raises Steel Industry Costs: Tata Steel MD

  • Geopolitical tensions raise freight & insurance costs
  • Supply constraints for LPG & LNG add pressure
  • Downstream fabrication units struggling
  • Production not yet hurt, but costs rising
  • Industry discusses Odisha's steel growth roadmap
2 min read

West Asia conflict raising costs for steel industry, says Tata Steel MD TV Narendran

Tata Steel MD TV Narendran says Iran-US tensions are increasing freight, insurance, and fuel costs for the steel sector, impacting customers.

"It is increasing the cost for the industry because freight rates and insurance rates have gone up. - T V Narendran"

New Delhi, April 8

The ongoing conflict involving Iran and the United States in the West Asia region is pushing up costs for the steel industry, mainly due to rising freight and insurance rates, Tata Steel Managing Director T V Narendran said on Wednesday.

Speaking to ANI, Narendran said the geopolitical tensions are affecting the industry in several ways, though steel production has not been hit so far.

"It is increasing the cost for the industry because freight rates and insurance rates have gone up," he said.

He added that supply constraints for certain fuels and industrial inputs are also adding to the pressure.

"Sometimes there are constraints in supply of LPG and LNG and the cost of supply has also increased," Narendran said.

According to him, the impact is being felt across the supply chain, including among downstream manufacturing units that depend on steel.

"It is impacting in multiple ways... it has not hurt production yet, but it is impacting cost in different ways," he said.

Narendran also noted that some customer segments such as fabrication units are facing difficulties due to rising costs.

"It's impacting some of our customers, fabrication units, who are struggling sometimes," he added.

Meanwhile, Narendran said the Indian steel industry recently held discussions with the Odisha government on the long-term growth of the sector in the state.

The meeting, organised by the Indian Steel Association, focused on the future expansion of steel production in Odisha, which is one of India's largest steel-producing states.

Narendran said the discussion was not about company-specific expansion plans but about the broader growth roadmap for the state.

"Today about 27 million tonnes of steel is produced in Odisha and the discussion was on how to take it to 100 million tonnes between all the steel companies," he said.

He added that the industry is working with the government to identify bottlenecks that could affect the sector's long-term growth.

The meeting was attended by several major steel producers including Tata Steel and Jindal Steel and Power Limited and all the others

- ANI

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Reader Comments

P
Priyanka N
It's high time we focus more on self-reliance in energy. If LPG and LNG supply is getting hit, we need to accelerate our own green energy and coal gasification projects. 'Make in India' needs stable input costs.
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Aman W
The plan to scale Odisha's production to 100 million tonnes is ambitious and necessary for our growth. But these global conflicts show why we must also build resilient supply chains that aren't so vulnerable.
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Sarah B
While the MD's points are valid, I wish there was more discussion on how the industry plans to absorb or manage these costs without passing the entire burden to end consumers. Some transparency on that front would be helpful.
K
Karthik V
Feel for the small fabrication units. They are the backbone of manufacturing and get squeezed the most in these situations. Hope there's some policy support for them. 🙏
M
Michael C
Geopolitical instability in one region affects global trade everywhere. This is a stark reminder. India's focus should be on diversifying trade routes and partners to mitigate such risks in the future.

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