Outokumpu slows investment plans amid weak stainless steel market

Finnish company cancels plans for US expansion and nuclear investments due to market difficulties

Finnish company Outokumpu has announced the suspension of its investment plans in the United States and in nuclear power in Finland. The reason for this was weak market conditions in the stainless steel market and high import pressures, Reuters reports.

Outokumpu said that it is refusing to expand its stainless steel production in the US due to the unpredictable market situation. In addition, the company is looking for external partners to implement a small modular reactor project at its plant in Tornio, Finland. The decision to invest in the United States was made before the announcement of the new steel duties, but as Outokumpu’s CFO, Marc-Simon Char, noted, this does not mean that the company does not plan to invest in the United States in the future.

Char stressed that the US market remains very attractive for Outokumpu, and that the steel tariffs, which restrict imports from Asia to Europe and the US, are beneficial for the company. On the back of this news, Outokumpu’s shares were up 6.6% at the time of publication.

At the same time, the company reported a small operating loss of €3 million for the fourth quarter, in line with its previous forecasts made in December. J.P. Morgan analysts noted that this value was less negative than expected.

Outokumpu predicts that stainless steel shipments will grow by 10-20% in the first quarter of 2025 compared to the previous three months. Operating margins are also expected to improve, despite the impact of the strike in Finland in January, which cost the company €15 million.

As GMK Center reported earlier, global stainless steel production in January-September 2024 increased by 5.4% compared to the same period in 2023 to 46.09 million tonnes. During this period, Europe, including Ukraine, increased its stainless steel production by 4.9% compared to January-September 2023 to 4.69 million tonnes. The US increased its output by 9.1% y/y over 9 months – to 1.51 million tonnes.