Tata Steel expects 15% jump in raw material costs

The Wall Street Journal writes that Tata Steel Ltd. expects its raw material costs to increase around 15% in the next fiscal year starting April 1, mainly due to recent floods in Australia and higher demand from China.

"We expect a rise of around $1 billion in raw material costs this fiscal," Kees Gerretse, group director for procurement and transport, Tata Steel Group, said on the sidelines of an industry conference.

In the fiscal year ended March 2010, the company spent around $6 billion on the purchase of key raw materials such as coking coal, iron ore and metallurgical coke.

The company buys around 25 million-27 million tons of iron ore for its European operations and 17 million tons of coking coal for Europe and India.