Global – For Outokumpu in the first quarter of 2016, continued downward pressure on product prices and an increase in scrap costs offset the benefit of delivery volume increases in both Europe and the Americas. And the stainless steel major expects market conditions to remain challenging in the second quarter of this year, according to an interim statement from the company.
In Europe, underlying demand in key sectors outside of oil and gas is thought likely to continue healthy ‘but stock levels among distributors are still above historical averages’, it says.
Market dynamics in the Americas, meanwhile, have been showing some improvement, with lower stock levels among distributors, the announcement of price increases and the tackling of Chinese imports through an anti-dumping investigation.
However, developments at start of this year and the continued market uncertainties ‘clearly show that additional measures are urgently needed to change Outokumpu’s cost and competitive position’, notes ceo Roeland Baan.
‘While we expect steady progress in (the) stainless business in the second quarter, our results will be burdened by (the) weaker performance of the ferrochrome business driven by (the) low ferrochrome price and (the) US dollar.’