Tata Steel’s losses in the UK reached £1.1 billion due to the closure of the Port Talbot blast furnace

Tata Steel’s UK business recorded an almost fourfold increase in pre-tax losses in the financial year 2023/2024 (to March 2024) due to restructuring costs associated with the closure of blast furnaces and coke oven batteries in Port Talbot. This was reported by the Financial Times with reference to the company’s financial statements.

The amount of these losses in the period amounted to £1.12 billion, compared to £279 million in the previous financial period.

In September of this year, the company ceased production of primary steel in Port Talbot by shutting down the last blast furnace at the plant (the first one was shut down in July). The units will be replaced with an electric arc furnace – in October, the Indian group signed a contract with Italy’s Tenova to supply EAFs and additional equipment for the plant.

Tata Steel reported that restructuring and impairment charges related to the decision to close coke oven batteries and two carbon-intensive blast furnaces amounted to £625 million.

Revenue of the British division for the 2023/2024 financial year fell by 16% yoy to £2.6 billion due to lower steel prices and reduced supply volumes.

According to Tata Steel’s report, following the conclusion of the relevant green transition agreement in September this year, its UK business will have access to funding of “at least £1 billion of equity” from the parent company and £500 million from the UK government to “cover project costs.”

As GMK Center reported earlier, the narrowing of steel spreads in the first half of 2024/2025 (April-September) affected Tata Steel’s financial performance in the UK and the Netherlands. The company acknowledged that the global operating environment remained challenging, with key regions facing slower growth.