Finnish stainless steel manufacturer Outokumpu has announced a delay in its investment plans both in the United States and in Finland’s nuclear power sector, citing weak market conditions and increased import pressures in the stainless steel industry. The company revealed that it would halt its expansion plans for stainless steel production in the US, a decision influenced by the unpredictable nature of the market.

Outokumpu’s plans to invest in the US were initially formulated before the announcement of new steel duties, but the company’s CFO, Marc-Simon Char, explained that the decision does not reflect a complete withdrawal from future investments in the US. Despite the current challenges, Char emphasized that the US market remains a highly attractive prospect for Outokumpu. He also highlighted the favorable impact of US steel tariffs, which have restricted imports from Asia, a move that benefits the company by reducing competition and giving European and US producers a more favorable environment.

At the same time, Outokumpu is exploring external partnerships for a small modular reactor (SMR) project at its Tornio plant in Finland. This project, once fully implemented, could contribute to the company's long-term sustainability and energy needs. The search for external partners underscores the company’s commitment to advancing its energy initiatives, despite the financial pressures currently affecting the company’s operations.

Following the announcement, Outokumpu’s shares saw a significant 6.6% increase, a sign that investors are cautiously optimistic about the company’s strategic focus on resilience and long-term profitability.

However, Outokumpu also reported a small operating loss of €3 million for the fourth quarter, in line with its earlier forecast. While the loss was expected, analysts from J.P. Morgan noted that it was smaller than anticipated, offering a degree of optimism in an otherwise challenging market. Looking forward, Outokumpu anticipates a 10-20% increase in stainless steel shipments during the first quarter of 2025 compared to the previous three months. Operating margins are also expected to improve despite the impact of a strike in Finland in January, which cost the company approximately €15 million.

Globally, the stainless steel market has shown growth, with global production rising by 5.4% in the first three quarters of 2024, reaching 46.09 million tonnes. Europe, including Ukraine, saw a 4.9% increase in production, reaching 4.69 million tonnes, while the US increased its output by 9.1% year-on-year, producing 1.51 million tonnes. Despite this overall growth, Outokumpu is focused on navigating current challenges while keeping a long-term eye on strategic investments that will ensure its competitive position in the global market.

In summary, while the weak market conditions have forced Outokumpu to temporarily slow down on key investments, the company remains committed to its strategic goals, looking for opportunities to rebound with stronger market conditions and sustainable energy projects in the future.