Reuters reported that Indian Tata Steel missed forecasts with an 89% collapse in the Q2 profits. Besides, the firm has seen the tough outlook for the next few quarters due to the volatility in raw material prices and weak demand in Europe.

The company’s Q2 net profit was reported at 2.1 billion rupees, in comparison of 19.8 billion in the same period of last year. Nevertheless, its net sales increased by 16% to 325.07 billion rupees.

Besides, Tata Steel reported an increase of US$50/ton in average prices of iron ore and coal in the September quarter while average steel prices in Europe dropped by US$30/ton.

Tata steel said it had total net debt of US$9.2 billion at end-September, much of it from its $13 billion acquisition of Anglo-Dutch steelmaker Corus in 2007. Its debt was at US$9.1 billion at the end of June.

Tata Steel pointed out that the persistently low demand from the European construction sector, accounting for two-thirds of its global capacity of about 28 million tons, was causing concern.

In fact, Tata Steel has been facing an uncertain outlook, with several European firms reducing output in recent months.

Though the firm does not expect another cut in the December quarter, it may make one in January or February.

However, Tata Steel expects volume growth at its Indian operations, accounting for a quarter of global capacity, of 7%~8% annually, despite slowing economic activity and weakening demand from the construction and automobile sectors.