Outokumpu Corporation
Press release/Investor News
February 13, 2025 at 8.50 am EET
Outokumpu has decided not to invest in cold rolling capacity expansion in the U.S. at this point of time
On August 3, 2023, Outokumpu communicated that in the next strategy phase, commencing in 2026, the focus will be on strengthening the company's market position further and developing more globally diversified operations. As part of that, the company announced it was seeking to increase its existing cold rolling capacity.
Based on an extensive feasibility study, Outokumpu has decided not to invest in the expansion of its cold rolling capacity in the U.S. at this point of time. However, in line with earlier communication, the company has set a target to increase its cold rolling capacity in business area Americas by 80 kilotons through focused de-bottlenecking investments and productivity improvements by the end of 2025. Outokumpu remains well on track to reach this target, having achieved a total 65 kiloton increase at the end of 2024.
Impact of the newly introduced tariffs to be assessed - U.S. is an attractive market to Outokumpu
The February 10, 2025, proclamations expanding the 25% import tariffs on steel and certain steel derivatives imported into the U.S. may materially impact the analysis conducted prior to those announcements. Outokumpu remains committed to the U.S. market and will follow closely the impact of the expanded tariff action, and in the meanwhile focus on improving efficiency.
"We have a strong position in the U.S., and we continue to see it as an attractive and robust market for Outokumpu in the long-term and aim to further strengthen our position there. Given the current unpredictable market environment with significantly increased imports in the recent years, the result of our feasibility study did not support making a capital-intensive investment in additional cold rolling capacity for the time being. This allows us to direct our capital into other areas as we are currently evaluating the long-term strategic options to grow and develop our business further, including in the U.S," states Kati ter Horst, President and CEO at Outokumpu.
"Import penetration, mainly from Asia, into the North American market has nearly doubled during the past five years, and this has clearly impacted our decision not to increase our production capacity at this point. Now, as the newly introduced tariffs may decrease import pressure, we will follow the situation closely. We support free trade, but it is crucial to ensure a level playing field both in the U.S. and Europe," Kati ter Horst continues.
Outokumpu has integrated stainless steel operations, including melt shop, hot rolling operations* and cold rolling operations in Alabama, U.S. and cold rolling operations in San Luis Potosi, Mexico. In business area Americas, the company has approximately 900 kilotons of melting and hot rolling capacity and approximately 600 kilotons of cold rolling capacity, of which 350 kilotons in the U.S. and 250 kilotons in Mexico.**
* Hot rolling mill owned and operated by AM/NS, tolling contract in place until 2051
** All capacity numbers are name plate capacities.
For more information:
Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 40 071 9669
Media: Päivi Allenius, SVP - Communications and Brand, tel. +358 40 753 7374 or Outokumpu media phone +358 40 351 9840 / e-mail media(at)outokumpu.com
Outokumpu is accelerating the green transition as the global leader in sustainable stainless steel. Our business is based on the circular economy: our products are made from 95% recycled materials, which we then turn into fully recyclable stainless steel. This steel is utilized in various applications across society, including infrastructure, mobility, and household appliances. We are committed to 1.5°C target to mitigate climate change, and with up to 75% lower carbon footprint than the industry average, we support our customers to reduce their emissions. Together, we are working towards a world that lasts forever. Outokumpu Corporation employs approximately 8,500 professionals in close to 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq Helsinki. Read more: www.outokumpu.com
