Fresh steel capacity of 5 mtpa will be added to Kalinganagar plant in Odisha
Tata Steel expects its market share in the automotive sector to increase to 55 per cent from 50 per cent now and demand for imported steel to reduce with the newly commissioned high-tensile steel capacity being ramped up in Kalinganagar, Odisha.
The company expects 5 mtpa of fresh capacity to be added by the end of this fiscal.
Prabhat Kumar, Vice-President-Marketing & Sales (Flat Products), Tata Steel, told businessline that the newly commissioned capacity will cater to import substitution as the continuous annealing line quality will be better than the best of the steel produced anywhere in the world.
Once fully ramped up to 5 mtpa, domestic automobile companies can stop importing completely as the entire range of high quality steel will be available in India, he said.
“Almost all the major OEMs are in touch with us. They want us to supply the steel which they are currently importing,” he said.
They have completed the plant approvals and are looking forward to receive the steel for their sample approvals and final commercial supplies, said Kumar.
What would take generally 8-9 months for approval, Tata Steel expects to get in 3 months and the domestic supplies will result in cost saving for the automobile companies as it would cut down on lead time, Kumar pointed out.
“The current localisation percentage of automotive customers is close to 70 per cent. We are expecting an import substitution of 20-25 per cent immediately and going up to 30 per cent,” he said.
‘slowdown temporary’
Tata Steel is hopeful that the slowdown in the automobile sector will not have much impact on the demand in the long run.
The auto sector is facing a slowdown for a temporary period, maybe this year because of the high growth in the past, he said.
The current slowdown is a transition and things will start picking up after the monsoon, he added.
Tata Steel expects revenue from value-added products to touch 50-55 per cent against 40 per cent.
The value added cold rolled and galvanised products should fetch a realisation of close to about $100 per tonne and $150-180 per tonne respectively over and above the HRC prices, said Kumar.
The company expects the automotive steel capacity addition by others such as JSW Steel and AM/NS Steel will also be absorbed given the strong growth prospects in the sector.
In a matured automotive markets, he said there is space for 2-3 players, and there is one dominant player and market share leader, he said.
“There could be some supply surplus in the interim. Given the automotive sector growth of 8-9 per cent for the next five years, the capacity expansion will ensure that the country has enough suppliers and there is no need to import,” he said.
Published on August 12, 2025
