NEW YORK The top executive of AK Steel Corp. has described Outokumpu Oyjs push into the North American stainless market as "illogical," claiming that the market is already at overcapacity and adding more "doesnt make sense."
Competition in the stainless market "remains brutal," AK Steel chairman, president and chief executive officer James L. Wainscott said during a Jan. 29 conference call.
Wainscott said that the commodity stainless market has "way too much capacity both domestically and globally," and his company is "somewhat amazed, if not stunned, when we hear comments that (Outokumpu) will be coming into the market to add perhaps as much as 1 million tons of capacity in a market thats really overcrowded already."
Outokumpu Stainless USA LLC told AMM last week that it is seeking to gain 25 percent of the North American stainless market by 2014 by being "competitive on pricing" as it ramps up production at the Calvert, Ala., facility it acquired in 2012 (amm.com, Jan. 25).
"We think, candidly, that the whole approach is illogical and perhaps borders on insanity. To bring 1 million tons to a market that already has 1 million more than it needs and to say that youll be competitive on pricingat least, thats their intentionI just dont see how that happens," Wainscott said.
AK Steel would be "keeping a close eye" on the Calvert ramp-up, he said, as well as on Pittsburgh-based Allegheny Technologies Inc.s construction of a hot-rolling and processing plant in Brackenridge, Pa., which is expected to be commissioned in 2014 (amm.com, Jan. 24).
Wainscott said that West Chester, Ohio-based AK Steel had recently noticed a "little bit of improvement" in the domestic stainless market, although "not as much as wed like."
"The good news for us where the market is strengthening is really the ... 400-series portion of that market, as a function of the growth in automotive generally," he said. "Were looking for a pickup in orders from appliance, automotive and passenger rail car customers, especially for bright trim applications."