Finland’s Outokumpu beats earnings estimates in challenging environment
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Finland’s Outokumpu warns on weak Europe as demand, pricing concerns persist
Finnish stainless steel maker Outokumpu (OUT1V.HE) warned on Thursday that continued price pressures and subdued demand in Europe would lead to falling shipments and earnings in the third quarter. CEO Kati ter Horst: “In Europe, the stainless steel industry faces persistent challenges, including low-priced imports from Asia, and elevated energy costs” European steelmakers, already struggling with weak demand, high costs and competition from cheaper Chinese imports, face an additional challenge this year from President Donald Trump’s tariffs on U.S. imports.
July 31 (Reuters) – Finnish stainless steel maker Outokumpu (OUT1V.HE) , opens new tab warned on Thursday that continued price pressures and subdued demand in Europe would lead to falling shipments and earnings in the third quarter, sending its shares more than 5% lower.
“In Europe, the stainless steel industry faces persistent challenges, including subdued demand, low-priced imports from Asia, and elevated energy costs,” CEO Kati ter Horst said in an earnings statement.
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European steelmakers, already struggling with weak demand, high costs and competition from cheaper Chinese imports, face an additional challenge this year from President Donald Trump’s tariffs on U.S. imports.
Aside from raising costs when exporting from Europe, Trump’s tariffs on steel and aluminium, first rolled out at 25% in March and raised to 50% in June, are diverting shipments meant for the U.S. market, risking an increase in cheap imports into Europe.
“Asian imports to Europe remain high compared to the low demand in the stainless steel market,” Outokumpu said.
The company, whose stainless steel products are used in tanks, facades and consumer goods such as washing machines, said that the pressure on stainless steel prices was expected to continue in Europe in the third quarter.
That echoed comments from rivals Acerinox and SSAB who last week reported earnings below market expectations as tariff-driven uncertainties shake the market.
Outokumpu’s stainless steel deliveries are expected to fall between 5% and 15% in the third quarter compared to the second due to seasonality effects and market weakness, it said.
It also expects its core profit to be lower in the third quarter. That will include an impact of up to 10 million euros from maintenance breaks in Europe.
In the U.S., where Outokumpu is the second largest stainless steel producer, it does not see signs of demand recovery yet, it said.
Its core profit beat analysts’ expectations at 75 million euros in the second quarter of the year.
($1 = 0.8744 euros)
Reporting by Jagoda Darlak in Gdansk; editing by Milla Nissi-Prussak
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