Tata Steel on the rise

The increase was due to a sharp rise in steel prices of Bt12,600 per tonne, while the cost of steel products increased by Bt6,100 per tonne, resulting in a gross margin increase of Bt6,500 per tonne, boosted by additional sales of 52,000 tonnes.

Company president Santi Charnkolrawee said in a statement Tata Steel's revenue in the first quarter was Bt11.18 billion from sales volume of 351,000 tonnes in the first quarter, compared to sales revenue of Bt10.15 billion and sales volume of 388,000 tonnes in the fourth quarter last year.

The rise in sales revenue was due to high global demand for steel billets, which have caused international billet prices to soar and reduced availability. This has resulted in a simultaneous jump in scrap, finished rebar and wire-rod prices.

However, the lower sales volume is primarily due to a slower take up on account of the rainy season.

Siam City Research Institute (SCRI) said in a research note that the company should see higher net profit in the second half because global demand between 2008-2010 is forecast to grow by 6-7 per cent a year. Higher steel prices in the second half this year should boost Tata Steel's 2008 net profit growth by 59 per cent on year, SCRI said.

"The company should keep its margin spread of over Bt10 per kilogram, while its competitors will face a shortage, this will boost net profit this year to Bt4.3 billion," SCRI forecast.