Outokumpu Halts US Expansion Amid Weak Demand and Rising Imports

Outokumpu

Finnish Stainless Steel Giant Shifts Focus to Productivity Gains in the Americas

Outokumpu, Finland’s largest stainless steel producer, has shelved its plans to expand cold-rolling capacity in the United States. The decision follows a 2023 feasibility study, which concluded that market uncertainty and increased import pressure render further investment unviable.

The company made this strategic pivot despite new US import tariffs of 25% on steel and select steel derivatives. While these measures aim to ease import pressures, Outokumpu believes current conditions remain too volatile for major capital spending. CEO Kati ter Horst cited doubling import penetration—mainly from Asia—into North America over the past five years as a major concern.

Strategic Shift Targets Organic Growth over Greenfield Expansion

Instead of building new facilities, Outokumpu will prioritize boosting output at existing American operations. The group already added 65,000 tonnes per year in 2024 and aims to reach an additional 80,000 t/yr increase through productivity upgrades by end-2025.

The firm will also monitor how the newly imposed tariffs impact steel imports, particularly from Asia. Any sustained drop in foreign inflows could prompt a reassessment of the expansion strategy. However, for now, cost discipline and efficiency remain the top priorities.

Declining Demand Hits Earnings and Shipment Volumes

Outokumpu reported a €3 million EBITDA loss in the fourth quarter, as stainless steel shipments dropped 6.2% year-on-year to 422,000 tonnes. Full-year shipments fell to 1.792 million tonnes, while annual earnings plunged 66% to €177 million.

The company attributed these declines to "historically low" European stainless steel demand and surging import volumes. Adjusted Q4 EBITDA in Europe dipped to a €32 million loss. Looking ahead, Outokumpu expects Q1 2025 deliveries to rise 10–20% but warns of continued pricing pressure due to weak demand.