Tata Steel , the world's No. 7 steelmaker, expects demand recovery in its key European market to be volatile and is targeting production next year at similar levels to the current fiscal year, a top official said.

"Recovery in Europe will be very volatile. We are keeping our target at the current year's production level," Chief Financial Officer Koushik Chatterjee said in a conference call with analysts.

The company, which operates two-thirds of its global capacity in Europe, reported on Thursday a net loss of Rs 687 crore for the December quarter, its first quarterly loss in more than two years.