NEW YORK The North American stainless steel market will likely grow 3 percent this year, Outokumpu Oyj has forecast, creating "good momentum" for the ramp-up of the companys Calvert, Ala., facility.
The companys North American division, which it hopes will reach positive earnings by 2014, recorded a 200-million ($267.2-million) loss in 2012, which Outokumpu chief executive officer Mika Seitovirta said in an earnings presentation was due primarily do nonrecurring costs associated with the ramp-up of the Calvert facility.
Seitovirta said the Stainless Coil Americas segment is expected to reach positive earnings in its 2014 full-year results.
"You saw the end-demand of stainless was 3 percent positive for this year, so its good momentum for us with the ramp-up," he said. "Two hundred thousand tonnes is our 2013 production target (for Calvert). We are confident that we are getting there. The operation is working, and we have growing end-market demand."
Seitovirta said the company would be "ramping down" its hot-band imports from Europe in 2013 as the Calvert ramp-up progresses.
The company said that the North American stainless steel market grew 6 percent last year, but expects growth to slow to 3 percent from 2013 to 2017. In contrast, the global stainless market grew just 2 percent in 2012 and is forecast to grow 4 percent this year.
The company told AMM in January that it is targeting a 25-percent market share in North America by 2014, and that it intends to be "competitive on pricing" (amm.com, Jan. 25).
The Espoo, Finland-based company posted a net loss of 535 million ($714.6 million) in 2012including nonrecurring items of 200 million ($267.2 million)compared with a 180-million loss the previous year on sales that fell 9.4 percent to 4.55 billion ($6.06 billion) from 5.01 billion.
"For Outokumpu, 2012 was characterized by the global economic slowdown and our announcement of the Inoxum acquisition. The soft demand in Europe resulted in continued negative results for the full year, despite the significant cost-savings programs," Seitovirta said in a statement. "Unfortunately, due to continued weakness in the markets for stainless steel in Europe and globally, the starting point for the new Outokumpu is more challenging than we anticipated 12 months ago."