By Jagoda Darlak
(Reuters) – Finnish stainless steel maker Outokumpu beat market expectations for its third-quarter core profit (EBITDA) on Wednesday, helped by improved result in its ferrochrome business and higher stainless steel prices in Europe.
It warned however that deteriorating markets in Europe and North America would hurt its stainless steel business in the final quarter of the year, echoing comments from rivals SSAB and Acerinox.
It expects stainless steel deliveries to be flat or decline by up to 10% in the fourth quarter, along with sequentially lower core earnings.
“We are facing challenging market conditions both in Europe and the Americas,” Outokumpu’s new CEO Kati ter Horst said in the statement.
European steelmakers have been struggling with weak demand, cost inflation and cheaper imports from Asian rivals, which last year dragged down profits from the record levels seen in 2021 and 2022.
“We do see a lot of circumventing activities of material from China through other countries into either the North American market or the European market,” finance chief Marc-Simon Schaar told Reuters.
He added imports were increasing in both Europe and the Americas, with imports in North America at the highest levels the group had observed there in the last four years.
Outokumpu’s adjusted EBITDA was 86 million euros ($93 million) in the third quarter, above analysts’ average forecast of 72.9 million in a company-provided poll.
Core profit in its Europe and Ferrochrome business areas came 55% and 36% above analysts’ forecasts, respectively, and ter Horst said demand for its low-emission ferrochrome, an alloy used to produce stainless steel, had remained resilient .
But in the Americas region, where Outokumpu generated nearly a third of its sales last year, adjusted EBITDA plunged 90% to 5 million euros, missing market expectations of 20 million.
($1 = 0.9243 euros)
(Reporting by Jagoda Darlak in Gdansk; editing by Milla Nissi)
