CHEAP steel imports from China and Russia and a drop in demand have hit profits at Tata Steel.

The India-based business reported net losses of £215m in the three months to the end of 2015.

Tata Steel is in the final stages of talks with investor Greybull Capital LLP to sell its loss making Long Products division which employs about 600 workers.

The company last month announced 1,050 job cuts in the UK, which includes 60 at its Hartlepool pipe mills.

Dr Karl-Ulrich Köhler, managing director and chief executive of Tata Steel in Europe, said: “Growing European steel demand continues to be undermined by a flood of imports into the region. Chinese steel shipments into Europe leapt more than 50 per cent last year, while imports from Russia and South Korea jumped 25 per cent and 30 per cent respectively. The European steel association has identified that Chinese steel is being exported at prices below the cost of production.

"This unfair trade is undercutting domestic producers and harming the European steel industry which employs many thousands of people and is at the foundation of much of the region’s cutting-edge innovation. That’s why we are calling on the European Commission and national governments to speed up and strengthen action against unfair trade.

"This perfect storm caused the deterioration of our financial performance in the last quarter and led to us announcing restructuring in the UK where our operations also face higher regulatory costs. These changes will continue to be a core focus in a bid to improve our competitiveness and enable us to concentrate on supplying higher-value products to customers."