LONDON (Scrap Monster): Since the recession in 2009, the European feeder of Tata steel, which used to be the major revenue of the company, has been dropping. Due to the loss caused by the recession period the company has been working on to reduce the service costs by cutting down workers and other costs. Steel price remained constant while the coaking coal and iron ore prices have been steeping steadily. This may act as a boon for the company. At present the operating margins at the European centre of the company remains to be a single digit.
The main rival of the company, ArcelorMittal's margins at their respective European centre is staking higher. Expansion in the steel spreads has given ArcelorMittal a strong hike.
Analysts argue that the stable price in steel may prove fortunate for the Tata steel company.
Thanks to the internal reorganization that, the company has survived for so long. Operating line of the company shows increase in profit, even so the bottom layer of the company is still in danger.