Port Talbot steelworks owner makes first pre-tax profit in 13 years

theguardian.com:

The owner of Port Talbot steelworks in south Wales has made its first pre-tax profit in 13 years thanks to record steel prices and a recovery in demand across Europe as pandemic restrictions eased.

Tata Steel UK (TSUK) reported a pre-tax profit of £82m in the year to the end of March, a dramatic improvement on the £347m and £654m losses of the previous two years.

The company, which said it was still in talks with the UK government regarding the major investment required to move to greener steel-making, recorded an increase in revenues of 58% year on year – up from £1.97bn to £3.1bn.

Britain’s largest steelmaker said this surge was fuelled by a 53% increase in the average revenue per tonne of steel, with prices soaring to record levels since the start of the pandemic, as well as a 3% increase in deliveries.

“This improvement is attributable to the recovery of the European steel market from the weakened market conditions caused by Covid-19 pandemic the previous year,” the company said in its annual financial results.

However, TSUK, which derives 59% of total revenues from the UK and almost 37% from wider Europe, warned that the return to profitability came as costs continue to climb, with energy prices “rising significantly” in the second half of its financial year. Total operating costs climbed from £2.2bn to £2.98bn year on year.

Port Talbot, the UK’s largest steelworks, produced 3.5m tonnes of liquid steel in the year to the end of March, an increase of 100,000 tonnes on the prior year.

The company said global steel demand increased by 2.7% in 2021 – up from just 0.5% growth in 2020 – with global production rising 3.6%.

TSUK said the recovery in the automotive sector had been “particularly strong”. However, supply chain issues,