Propane shortage may impact Tata Steel Tinplate operations: MD TV Narendran

Jamshedpur: T. V. Narendran on Tuesday said supply disruptions, rising logistics costs and fuel shortages are beginning to impact the steel industry, leading to upward pressure on prices.

Speaking to the media on the sidelines of the JCAPCPL Workers Union’s 10th anniversary programme at Michael John Auditorium on Tuesday, the Tata Steel CEO said that while the situation is evolving rapidly, the company is closely monitoring the impact and taking alternative measures to manage operations.

Narendran explained that disruptions in the supply of key inputs like LPG and propane have posed challenges in recent weeks. “We receive several essential inputs from external sources, and any disruption directly affects operations. There was an LPG-related issue earlier, which has improved now, but propane supply remains tight,” he said.

He noted that the company depends significantly on propane for certain processes, especially in tinplate operations. With limited stock availability of just two to three days, Tata Steel has to closely track supplies on a daily basis. “If tanker supply continues smoothly, operations remain stable. However, any interruption could affect production in the short term,” he added.

Narendran said the company is actively exploring alternative fuels and adjusting production priorities to minimise risks. Despite these challenges, production has not been impacted so far. “We are managing the situation, but if shortages persist, there could be some effect,” he cautioned.

On the financial impact, Narendran highlighted that rising freight costs have significantly increased operational expenses. “Rates have increased by $7–10 per tonne, and insurance costs have also risen,” he said.

He added that these rising costs are contributing to higher steel prices in the market. “When input and logistics costs go up, it eventually reflects in product pricing. The market is already witnessing this trend,” he said.

Commenting on the company’s performance, Narendran said the current financial year has been positive from a production standpoint. Detailed results will be announced soon, but key highlights include strong output from Jamshedpur operations and improved performance after the relining of a major blast furnace.

“Our Jamshedpur plant has performed well. The relining work took some time, but operations have stabilised and are running efficiently now,” he said.

He also highlighted progress in other locations, including the commissioning of a new facility in Ludhiana and ongoing expansion work at Kalinganagar. “Several new facilities are being developed in Kalinganagar, and investments are also being made in Jamshedpur, including the commissioning of the combi mill and expansion in tinplate capacity,” he said.

Narendran noted that while Jamshedpur remains a key hub, there is limited scope for large-scale expansion within the city due to space constraints. “The plant is spread over about 1,800 acres and has a capacity of around 11 million tonnes. Further expansion at this location is limited, so we are focusing more on downstream and technology upgrades,” he explained.

He said the company is investing heavily in modernisation, efficiency improvements and green technologies to reduce its carbon footprint. “Our focus is on sustainability, new technologies and improving efficiency across operations,” he said.

On capital expenditure, Narendran stated that Tata Steel continues to invest between ₹10,000 crore and ₹15,000 crore annually. “This level of investment will continue as we expand capabilities, adopt new technologies and strengthen our operations,” he said, adding that there are no constraints in planned investments.

Responding to a question on government support, Narendran said industry concerns are being communicated through platforms such as the Confederation of Indian Industry (CII). “The government is responsive and has taken steps in certain areas, such as easing LPG-related issues. However, many factors affecting the industry are global in nature and beyond direct control,” he said.

He acknowledged that while the government is supportive, challenges such as global price fluctuations, logistics disruptions and supply shortages require coordinated efforts from all stakeholders.

Narendran concluded by saying that the steel industry is navigating a dynamic environment where multiple external factors are influencing operations and costs. “We are adapting continuously, looking at alternatives and ensuring that production remains stable. The situation is evolving, and we will have to respond accordingly,” he said.