The UK government’s decision to sharply curb steel imports and impose higher tariffs could help Tata Steel’s UK operations turn profitable in the next fiscal year, even as the company is set to miss its FY26 break-even target, analysts said.
On Thursday, the UK government said that “from 1 July 2026, overall quota levels for steel imports will be reduced by 60% compared with the safeguard, and steel coming into the UK above these levels will be subject to a 50% tariff”.
“This measure will apply to imported steel products that can be made in the UK,” said Peter Kyle, Secretary of State for the Department of Business and Trade, in a statement on 19 March.
The move is expected to benefit domestic producers, including Tata Steel’s UK arm and British Steel, by curbing low-priced imports and supporting local pricing.
However, analysts caution that while the policy shift is a clear positive, its impact will be gradual, with meaningful benefits likely to accrue only from the next fiscal year. Tata Steel management had earlier told Mint that its UK operations will not break even this fiscal.
The timing is significant. Tata Steel has consistently maintained that its UK turnaround hinges on policy support to counter unfair import competition. In the absence of such measures, subdued steel prices have continued to drag performance.
Key overhang
The UK business remains a critical pressure point for Tata Steel. Although smaller than its India operations in revenue terms, persistent losses in the UK have weighed on consolidated profitability, making a turnaround in the region crucial.
“The UK government’s move to tighten import quotas and impose tariffs is a clear positive for domestic players like Tata Steel. Weak pricing has been the key challenge in the UK, and these measures are expected to provide much-needed price support and improve profitability,” said Suman Kumar, analyst at Philip Capital.
“Once the policy support is implemented, pricing should stabilize, putting the company on track to achieve break-even in the next fiscal, in line with management’s earlier guidance that a turnaround hinges on protection against cheap imports,” he said.
Policy shift
Analysts say the move signals a more supportive policy environment going forward, reflecting a clearer intent to back domestic steelmakers.
“The statement underscores a clearer intent to support local industry, aligning with the company’s earlier guidance that policy intervention is critical to counter cheap imports and crucial for ebitda breakeven,” said Aditya Welekar, metals analyst at Axis Securities.
The probability of break-even in FY27 will now depend on effective implementation of these safeguards and their impact on prices. However, following these developments, the likelihood of Tata Steel UK achieving break-even has improved, as pricing support could drive a gradual recovery in profitability, Welekar added.
Missed target
Tata Steel did not respond to Mint’s queries sent on Friday regarding revised guidance for UK break-even.
Benchmark hot-rolled coil prices in the UK are currently around £500–510 per tonne—about £100 short of levels required for break-even, the company’s top executives told Mint in early February, adding they were hopeful of policy support.
Tata Steel UK contributes almost 10% to the steelmaker's total revenue from operations. The steelmaker in UK is importing steel substrate (slabs and hot-rolled coils) to feed its UK downstream operations following the closure of Port Talbot blast furnaces. For the first nine months of FY26 it had a total deliveries of 1.72 million tonnes.
In Q3, UK losses narrowed to £63 million from £66 million in Q2. For the first nine months of the fiscal, the business reported an Ebitda loss of £170 million.
Tata Steel UK will not break even in FY26 and will miss its revised guidance. The company had earlier guided for break-even by Q2 before pushing the target to the end of the fiscal year.
“It is not possible to break even at the current prices, unless there is some action by the government,” Narendran had told Mint earlier.
Long road
Tata Steel entered Europe through its $12 billion acquisition of Corus Steel in 2007, which included the Port Talbot plant and operations in the Netherlands.
In 2024, the company received a £500 million grant from the UK government as part of a £1.25 billion for a 3MTPA green steel project at Port Talbot. In September 2025, it also secured up to €2 billion in funding support from the Dutch government for its green steel transformation project.
The recovery now hinges on how effectively these curbs are implemented and whether they translate into sustained price gains. For now, while policy support is finally in place, Tata Steel’s break-even goal has slipped just out of reach.
