Outokumpu Issues Profit Warning Amid Stainless Steel Market Weakness

Outokumpu

Finland-based stainless steel producer Outokumpu has issued a profit warning, revising its guidance for the fourth quarter due to a combination of challenging market conditions, operational setbacks, and falling raw material prices. The company now anticipates its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q4 to be significantly below the €86 million ($90 million) recorded in the third quarter.

Outokumpu cited multiple factors contributing to the revision, including:

• Prolonged maintenance at its Tornio plant in Finland, which exceeded initial expectations of a €10 million impact.

• Weakened stainless steel market conditions, reflecting sluggish demand across the European value chain.

• Negative inventory valuation effects, driven by plummeting stainless steel and scrap prices.

The company hinted that Q4 adjusted EBITDA could approach breakeven levels or even turn negative due to these compounded challenges.

European Stainless Steel Market Pressures Intensify

The European stainless steel market is facing significant headwinds, with demand declining across the value chain. Falling raw material prices and broader economic uncertainties have exacerbated the situation. The Supermetalprice assessment for stainless steel 304 cold-rolled 2mm sheet delivered to northwest Europe has dropped nearly 15% since Q2, averaging €2,550/t. Similarly, stainless steel scrap 304 (18-8) solids cif Rotterdam has seen a sharp 21% decline, averaging €1,155/t.

Outokumpu’s stainless steel deliveries in Q4 are expected to decrease by 0-10% compared to Q3, with the company now expecting shipments to hit the lower end of the range. Total stainless steel shipments fell by 2.23% year-on-year to 459,000 tonnes in Q3, reflecting broader market stagnation.

These conditions have forced Outokumpu to reassess its operational strategies, while other producers in Europe are similarly reducing capacities to address supply and demand imbalances.

Looking Ahead

Outokumpu’s profit warning highlights the broader challenges facing the European stainless steel industry. Demand-side struggles, coupled with falling prices for raw materials and finished goods, are reshaping market dynamics. As Outokumpu navigates through these turbulent times, the focus will remain on mitigating operational inefficiencies while anticipating potential recovery in global demand for stainless steel.

Global Stainless Steel Output Sees Growth in 2024

Stainless Steel

Stainless Steel Production Increases Worldwide in 2024

Global stainless steel production saw an impressive rise in 2024, with output increasing across all regions. According to the World Stainless Association, stainless steel melt shop production rose by 5.4% in the first nine months of the year. This increase brings total production to 46.1 million tons (mn t), reflecting strong demand for this critical material used in a variety of industries worldwide.

Regional Growth Across the Globe

Notably, several countries and regions saw substantial gains. The combined output from Brazil, Indonesia, Russia, South Africa, and South Korea surged by 11.2%, reaching 5.86 million tons. This increase highlights the rising production capabilities of emerging and established markets alike. In North America, the U.S. saw a significant boost in production, climbing 9.1% year-on-year to reach 1.5 million tons.

Europe also contributed to the global rise, with its stainless steel production increasing by 4.9%, totaling 4.69 million tons. Even in Asia, beyond China and South Korea, production expanded by 8.1%, reaching 5.39 million tons.

China’s Contribution to Global Production

China, which remains a dominant player in global stainless steel production, saw its output rise by 3.4% year-on-year, reaching 28.63 million tons in the first three quarters of 2024. Despite slower growth compared to other regions, China's output still accounts for a significant portion of the global total, underlining its continued importance in the steel industry.

Conclusion: A Positive Outlook for Stainless Steel Production

The global rise in stainless steel production reflects a robust recovery and ongoing demand across industries. With positive trends in multiple regions, the stainless steel market appears poised for continued growth. As production capacities increase worldwide, the outlook for the global steel market remains strong, driven by both traditional and emerging markets.

India’s JSL Proposes Zero Import Duty on Critical Raw Materials to Strengthen Domestic Steel Industry

Jindal Stainless Steel

Jindal Stainless Steel Calls for Reduced Import Duties on Molybdenum and Other Key Materials

Jindal Stainless Steel (JSL), a major Indian steelmaker, has proposed that the Indian government eliminate import duties on essential raw materials like molybdenum ore. Currently, ferro-molybdenum imports face a 5% duty. The proposal, made by JSL’s managing director, Abhyuday Jindal, comes ahead of India’s budget announcement on February 1 for the 2025-2026 fiscal year. Along with molybdenum ore, JSL recommends maintaining zero duties on other materials such as pure nickel, ferro-nickel, stainless steel scrap, and mild steel.

Boosting India’s Infrastructure and Stainless Steel Production

JSL’s proposal also calls for continued government focus on infrastructure spending, particularly in areas like inland waterways, rail infrastructure, and coastal shipping. This, Jindal argues, will support the stainless steel industry by improving operational efficiency and ensuring competitive raw material prices. Additionally, the Indian Stainless Steel Development Association (ISSDA) supports reducing customs duties on graphite electrodes and charge chrome to zero, which would further enhance industry operations.

However, to protect against cheap stainless steel imports, JSL suggests raising the basic customs duty on stainless steel products to 15% for countries outside of free trade agreements. This measure, JSL believes, would safeguard India’s domestic stainless steel market and contribute to the country’s Viksit Bharat 2047 vision.

Acerinox Stainless Steel Output Rises Despite Lower EBITDA in Q1

Acerinox Stainless Steel

Strong U.S. operations support Acerinox stainless steel production growth

Acerinox stainless steel output rose 11% year-over-year and 29% quarter-over-quarter in Q1 2025, driven by resilient performance in the U.S. market. The Spanish producer reported 512,000 tonnes of stainless steel and high-performance alloys during the period, with stainless steel alone accounting for 488,000 tonnes.

Revenue grows, but alloy surcharges weigh on earnings

While group revenues climbed 17% from Q4 to €1.55 billion, EBITDA fell 32% quarter-on-quarter to €102 million. Stainless steel segment EBITDA dropped by 50%, reflecting weaker European prices and lower alloy surcharges. European market softness was worsened by rising import pressure, with import share jumping from 14% to 22%.

Outlook driven by U.S. demand and strategic cost controls

Acerinox expects Q2 earnings to improve, backed by a strong U.S. order book and cost-optimization efforts at its Spanish Acerinox Europa and Haynes facilities. However, the company anticipates weaker high-performance alloy sales in Europe, even as U.S. volumes hold steady. The firm’s ongoing strategic plan aims to counteract tariff disruptions and safeguard profitability.

The Metalnomist Commentary

Acerinox’s performance shows how regional diversification—especially U.S. strength—can buffer global stainless producers from European price volatility. Its focus on cost control and operational strategy will be key as trade tensions and import surges continue reshaping the stainless steel landscape.

China's Stainless Steel Production Reaches New Heights in 2024

Stainless Steel

Record Output Driven by Robust Feedstock Supply and Global Demand

China's stainless steel industry achieved a record-high melt shop output in 2024, bolstered by a solid supply of feedstock and a strong demand from international markets. This surge in production underscores China's expanding influence in the global stainless steel market, positioning it to capitalize on growing consumption trends.

Diverse Product Range and Market Dynamics

The production dynamics varied across different stainless steel series, reflecting diverse market demands and applications. The 300 series, known for its high nickel content, saw an increase in output, mainly due to expanded production capacities in Shandong and new capacities in Fujian. In contrast, the 200 series—which contains lower nickel and higher manganese, typically used in construction and manufacturing—experienced a slowdown due to a sluggish real estate sector. Meanwhile, production of the 400 series, which is chrome-based, increased significantly as it began to replace some of the demand for the 200 series.

International Trade and Future Prospects

In 2024, China's stainless steel exports grew by 21.9%, reaching 5.04 million tonnes, supported by competitive international pricing and the availability of raw materials, particularly ferronickel. Imports of ferronickel, crucial for stainless steel production, also rose, largely due to increased shipments from Indonesia. Looking ahead to 2025, China's stainless steel production is expected to continue growing. This forecast is supported by a drop in prices for 304 stainless steel cold-rolled coil and the ongoing availability of cost-effective Indonesian ferronickel, which keeps Chinese products competitively priced in the global market.

Indian Stainless Steel Sector Faces Headwinds from Imports and Raw Material Volatility

ISSDA

India’s stainless steel sector may face short-term turbulence amid rising imports and fluctuating input costs, says the ISSDA.

Rising Imports and Raw Material Volatility Challenge Growth

The Indian Stainless Steel Development Association (ISSDA) warns that the domestic stainless steel sector could face challenges in early FY2025-26. Volatile prices for nickel and ferro-chrome, coupled with low-cost imports from China and Vietnam, are pressuring Indian producers. According to ISSDA president Rajamani Krishnamurti, these imports threaten local manufacturers’ margins and growth momentum.

However, India’s strong domestic demand and supportive government policies may offer some market stability. Still, the industry remains vulnerable to global supply chain disruptions and raw material dependency, particularly on Indonesian nickel.

Capacity Expansion and Infrastructure Demand Drive Optimism

Despite the headwinds, India’s stainless steel industry remains optimistic for FY2025-26.

The country’s installed capacity of 7.5 million t/yr remains underutilized, with 40% unused, but new investments aim to close this gap. Growth drivers include infrastructure development, urbanization, and Make in India initiatives.

The railways, construction, and public-private infrastructure projects are expected to boost stainless steel consumption. Additionally, renewable energy technologies such as solar panels and wind turbines present promising applications for stainless steel. The sector also sees long-term growth potential from green hydrogen and smart city development projects.

The Metalnomist Commentary

India’s stainless steel sector sits at a crossroads. Structural demand remains intact, but trade dynamics and global price shifts threaten stability. How India balances domestic capacity utilization, import regulation, and supply chain resilience will shape the industry’s mid-term outlook.

Europa Plant Drives 3Q Rise in Acerinox’s Stainless Steel Output Amid Challenges

Acerinox

Acerinox, a prominent Spanish stainless steel producer, saw an uptick in its steel output in the third quarter of 2024, driven by the reactivation of the Acerinox Europa plant in Los Barrios, Spain. This follows a significant five-month shutdown due to workers' strikes earlier this year. The plant’s resumption in production helped the company achieve a rise in melt shop production from the second quarter, signaling a positive recovery. However, despite the production increase, Acerinox's revenues in the stainless steel segment faced a decline due to ongoing challenging market conditions, particularly in Europe and the US.

Key Highlights from Acerinox’s Third-Quarter Performance:

• Production and Shipments Growth: Acerinox’s stainless steel output rose by 11.85% year-on-year, totaling 473,000 tons in the July-September period. The ramp-up of the Acerinox Europa plant contributed to a notable 23.2% increase in shipments from the previous quarter.

• Market Challenges: Despite the rise in shipments, the company’s stainless steel revenues declined both on a quarterly and yearly basis. Finished stainless steel prices have decreased, primarily due to reduced alloy surcharges, although the base price in the US remained stable.

• EBITDA Decline: The group’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the third quarter fell by 9% year-on-year, amounting to €86 million. The group's performance in the January-September period also showed a significant retreat, with EBITDA down by 47%, reflecting the industry's overall weakness.

• High-Performance Alloys Struggles: Acerinox’s high-performance alloys segment experienced a 46% year-on-year decline in EBITDA, driven by a sharp drop in nickel prices. However, the segment saw a 5.9% increase in output, reaching 18,000 tons in the third quarter.

• Strategic Moves and Diversification: In response to persistent weakness in the European market, Acerinox has diversified its portfolio. The company’s recent acquisition of Haynes aims to strengthen its foothold in the US market, especially focusing on higher value-added products. Additionally, Acerinox sold its loss-making subsidiary, Bahru Stainless, for $95 million to improve its balance sheet.

Outlook for Acerinox in Q4 2024:

Acerinox anticipates that market conditions will remain challenging in the fourth quarter. Geopolitical uncertainties, macroeconomic volatility, and market seasonality are expected to impact demand for stainless steel, particularly in Europe. The company has curtailed production at the Acerinox Europa plant in response to low demand and declining prices. However, Acerinox expects its EBITDA for the final quarter to surpass third-quarter levels, thanks to the sale of Bahru Stainless, though adjusted EBITDA is projected to remain lower.

The global stainless steel industry continues to grapple with high production costs, low sales prices, and declining demand, particularly in Europe. Meanwhile, the aerospace sector and the high-performance alloys market are expected to provide some relief for Acerinox as the company focuses on diversifying its revenue streams.

China Lifts Anti-Dumping Tax on Japan's Stainless Steel

The Chinese government has officially removed anti-dumping duties (ADDs) on stainless steel product imports from Japan, effective immediately.

On July 22, China's Ministry of Commerce announced the abolition of ADDs on Japanese stainless steel exports, including steel slabs, hot-rolled stainless steel sheets, and hot-rolled stainless steel coils. These duties, ranging from 18.1% to 29%, were initially imposed in July 2019.

This decision follows a ruling by a World Trade Organization (WTO) dispute settlement panel in June 2023, which found that China's measures against Japan violated WTO regulations. The panel recommended that China "bring the measure into conformity," according to Japan's Ministry of Trade and Industry (Meti).

In 2019, Japan's stainless steel exports to China, including the products affected by the ADDs, amounted to approximately ¥70 billion ($448 million), with around ¥9 billion subject to the duties, Meti reported. Updated export data were not immediately available, according to a Meti official speaking to Metalnomist.

In 2023, Japan exported a total of 699,023 metric tonnes of stainless steel products globally, marking a 12.6% decline from the previous year, as reported by the Japan Stainless Steel Association. A detailed breakdown by country was not provided.

European Stainless Steel Market Faces Mixed Trends Amid Price Stabilization

European stainless steel prices have recently stabilized, buoyed by projected supply constraints and unexpected demand spikes, yet the broader market remains under pressure.

Stabilization in Stainless Steel Prices

Over the past two weeks, European stainless steel prices have shown signs of stabilization, largely due to projected supply tightness following production cuts by Acerinox at its Acerinox Europa plant in Los Barrios, Cadiz, Spain, and a maintenance stoppage at Outokumpu's Finnish facility.

An unexpected increase in buyer interest in Germany led to slight price rises. However, the momentum is expected to fade as service centers delay purchases to next year amid persistent low demand across most regions.

Raw Material Insights: Stainless Steel Scrap and Ferro-Alloys

Stainless Steel Scrap

Despite low domestic demand, stainless steel scrap prices saw an unexpected boost last week, fueled by mounting export interest.

Ferro-Alloys

The ferro-molybdenum market has faced high price pressure, averaging $51.10/kg over the past month. Rising material costs and heightened Asian demand have driven prices up, challenging European producers who are focusing on lower-margin steels to sustain operations. Meanwhile, Indian ferro-chrome exports to Europe have contributed to excess supply, driving prices downward in early autumn.

Prices of high-carbon ferro-chrome (65% Cr) dropped by 8% in September, with further declines in October as producers in Kazakhstan and India slashed offers. However, with long-term contracts for 2024 expected to conclude shortly, a price rebound may be on the horizon.

Demand and Market Outlook

Demand for stainless steel and its raw materials remains subdued. Some European steelmakers may shut operations earlier for the winter due to low order volumes. This pessimistic outlook could prolong the market challenges for the remainder of 2024.

EU Steel Industry Faces Key Policy Shifts: A Call for Concrete Measures

EU Steel

The mood among European policy makers regarding the steel industry has notably shifted, with increasing support for the sector’s future. According to Axel Eggert, director-general of Eurofer, the European steel industry association, policymakers are beginning to recognize the importance of addressing the growing challenges in global steel production. However, while this shift in mood is encouraging, Eggert emphasized that these positive words must be followed by tangible actions.

Rising Political Support for EU Steel Industry

Eggert pointed out that there is more political backing for the European steel sector, especially as lawmakers become increasingly aware of the massive overcapacity in global steel production, particularly CO2-intensive steel. The Organization for Economic Cooperation and Development (OECD) predicts that global steel capacity will grow by 157 million tons over the next three years, which will likely negate the decarbonization efforts of the EU steel industry.

In response, the European Parliament has called for a European steel action plan, which has been embraced by European Commission President Ursula von der Leyen. However, Eggert stressed that while these statements are promising, they must be followed by concrete measures to ensure the long-term sustainability of the industry.

Green Steel and Public Procurement as Key Measures

One of the critical measures that Eggert advocates for is the implementation of public procurement for green steel. With the EU's ambitious decarbonization targets — a 55% reduction in CO2 emissions by 2030 and carbon neutrality by 2050 — Eggert emphasized that EU governments should lead by example. This means prioritizing green steel in public sector construction, vehicles, and other products, which would support European producers committed to decarbonizing their operations.

Global Overcapacity and Trade Distortions Impacting EU Steel

The steel industry crisis is largely driven by global overcapacity and low demand in Europe, exacerbated by high energy costs. Compounding this issue is the low-priced steel being exported by countries like China, Japan, and India, which depresses global markets. China’s exports, in particular, have been an issue for EU steel producers, as the country benefits from state subsidies, leading to significant trade distortions.

Eggert discussed how the EU has implemented anti-dumping measures on stainless steel from Indonesia, but Indonesia has circumvented these by exporting processed steel to third-party countries like Taiwan, Vietnam, and Turkey, which then re-export the products back to the EU. This tactic, along with the support from Chinese investments in Indonesia’s steel industry, has made Indonesia’s steel sector one of the largest globally.

EU Trade-Defense Measures: Need for Improvement

Eurofer has called for enhanced EU trade-defense measures to tackle issues such as dumping and excessive capacity from third countries. Eggert emphasized the need for improved steel safeguards and more effective enforcement of existing trade defense instruments. Currently, anti-dumping duties on Chinese steel are too low, undermining the efficacy of EU trade policies.

Carbon Border Adjustment Mechanism (CBAM) Concerns

The EU’s carbon border adjustment mechanism (CBAM) has been another point of contention. Third countries are already looking to export steel from their lowest CO2-emitting plants to avoid paying CBAM costs. Eggert advocated for including indirect CO2 emissions (Scope 2 emissions) in the CBAM, particularly for stainless steel, which is a major contributor to indirect emissions.

Scrap Export Concerns and India's Decarbonization Challenge

Finally, Eggert addressed concerns from India regarding the potential for a European export ban on scrap metal. While the EU does not currently have a scrap export ban, Eggert pointed out that India itself has export restrictions on scrap and needs to focus more on decarbonizing its domestic steel sector. He also warned that if India delays its decarbonization efforts until 2070, the EU will face a significant disadvantage in the global steel market.

China’s Jinhai to Halt Stainless Steel Output Amid High Costs and Weak Demand

Jinhai

China’s Jinhai, a prominent stainless steel producer in Guangxi province, has announced plans to suspend its melt shop production from January 1 for approximately 1 ½ months. This decision follows mounting production costs and weak downstream demand in the domestic market.

Production Halt Details

Jinhai, which operates a melt shop with an annual capacity of 1 million tons, produced around 900,000 tons of stainless steel in 2023, primarily using stainless scrap as its feedstock. The suspension of operations will impact production levels, contributing to an expected decrease in China’s total stainless steel output for the January-February period.

As of Q3 2023, Jinhai accounted for approximately 226,000 tons of China’s overall stainless steel production of 9.92 million tons. The company’s temporary shutdown follows broader industry challenges, including thinner profit margins and the threat of potential losses, particularly among producers in Guangxi and Zhejiang provinces.

Market Outlook and Impact

With production cuts becoming more common across various regions, the stainless steel industry is bracing for a downturn, particularly in light of the upcoming Lunar New Year holiday, which is expected to reduce market activity significantly. The Chinese market is forecast to see a reduction of around 300,000 tons in total stainless steel output during January and February. This will likely have a ripple effect on related markets, including feedstock prices for nickel pig iron and ferrochrome.

In the coming months, market participants are monitoring the situation closely, as production halts like Jinhai’s and soft demand are expected to weigh heavily on pricing dynamics across multiple sectors.

Global Stainless Steel Production Rises by 6.3% in First Half of 2024

Worldstainless

A Global Outlook on Stainless Steel Production

Global stainless steel production surged by 6.3% year-on-year, reaching 30.37 million tonnes (mn t) in the first six months of 2024, according to data released by Worldstainless, a Belgium-based industry research and development association.

Regional Performance Highlights

• China: The world's largest producer of stainless steel recorded a 5.9% increase, with production rising to 18.75mn t between January and June 2024.
• Asia (excluding China and South Korea): Other Asian nations showed notable growth of 9% year-on-year, producing 3.62mn t.
• Europe: The weakest regional performer, Europe reported a marginal growth of just 0.3% year-on-year to 3.14mn t.
• Other Regions:

1. The group of Brazil, Russia, South Africa, South Korea, and Indonesia collectively grew output by 10% year-on-year, reaching 3.84mn t.
2. The United States posted robust growth of 9%, with output increasing to 1.03mn t.

Indonesia's Crucial Role

Industry analysts emphasize that Indonesia's stainless steel output will be pivotal in shaping global market trends for the rest of 2024 and into 2025. The country’s expansion in production capacity and investments in the steel sector position it as a key driver of future growth.

Implications for the Market

The global rise in stainless steel production reflects an upswing in industrial demand, with particular strength in the Asian and American markets. However, Europe's stagnation underscores challenges in its industrial sector, including energy costs and economic uncertainties. The anticipated Indonesian growth could stabilize or even further boost global output, depending on demand trends and regional dynamics.

Europe Faces Deindustrialization Crisis Amidst Unfair Competition and Policy Struggles

Aperam

Europe’s stainless steel industry is at a critical crossroads, facing existential challenges due to high raw material costs and increasing competition from Asian producers. According to Timoteo di Maulo, CEO of Aperam, the European sector is particularly vulnerable due to its reliance on more expensive, environmentally-friendly processes, while Asian producers benefit from cheaper, carbon-intensive nickel pig iron (NPI). Speaking at the SMR International and Special Steels Conference in Rome, di Maulo warned, “Europe will die if it cannot create a level playing field,” likening the current situation to playing European football against American football, a game neither possible nor fair.

Stainless Steel Demand Decline and Unequal Standards

Market data from SMR revealed that real stainless steel demand in Europe is expected to fall by 6% in 2024, following a decline of 3% in 2022 and 8% in 2023. The gap in production methods between Europe and Asian competitors is widening, as Indian and Chinese producers are not required to use high scrap ratios, giving them a distinct cost advantage. European steelmakers, driven by stringent EU decarbonization policies, are forced to use higher-priced scrap, further straining the industry's competitiveness.

Di Maulo emphasized that while both Europe and Asia rely on ferro-nickel and NPI, European producers face additional financial burdens that threaten the industry’s long-term viability. The decarbonization measures that Europe imposes on its steelmakers are not mirrored in Asia, where efforts to reduce carbon emissions fall short of European standards.

The situation is compounded by the upcoming European Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2026. Di Maulo described CBAM as an experimental policy that risks accelerating deindustrialization by limiting raw material imports while incentivizing the import of finished goods. Other industry leaders echoed these concerns, warning that CBAM, conceived as a tax but transformed into a green policy tool, is impractical and will further weaken Europe's position in global trade.

Industry Leaders Call for Pragmatic Solutions

At the same conference, Indian producer Jindal Stainless highlighted India’s dependence on NPI due to rapid industrial growth and a shortage of scrap metal. Ratan Jindal, chairman of the company, pointed out that proposed restrictions on scrap imports, such as the EU Waste Shipment Regulation, will only exacerbate this issue.

The consensus among European stainless steel executives is that CBAM, as it currently stands, is deeply flawed. Spanish producer Acerinox’s CEO, Bernardo Velazquez, stressed the difficulty of applying CBAM uniformly across Europe due to differing national tax systems. Italian steelmaker Marcegaglia’s CEO, Antonio Marcegaglia, criticized CBAM for being limited to early stages of the production cycle and for failing to address the broader economic realities of the stainless steel industry. Dimitri Menecali of Arvedi AST added that without addressing Scope 3 emissions—those created further down the supply chain—CBAM would not effectively promote sustainability.

The industry is calling for more coordinated policies and international alliances to ensure Europe's stainless steel sector remains competitive. As di Maulo stated, “There is a role for industrialization in Europe, in innovation, high performance, and service-oriented materials.”

European Stainless Steel Scrap Prices Edge Up Amid Domestic Demand

Stainless Steel

European stainless steel scrap prices have seen a slight increase over the past week, supported by pockets of domestic demand and continued export market activity. The demand from Germany, in particular, has been reported as the strongest in Europe, driving prices higher. While sellers have been able to secure better profit margins, concerns about the sustainability of the current price levels remain.

Germany Leads Price Surge, Limited Growth Expected

SuperMetalPrice weekly assessment for 304 (18-8) stainless steel scrap solids CIF Rotterdam rose to €1,200-1,250 per tonne, up from €1,210-1,230 per tonne the previous week. Prices in Germany were at the higher end of the range, with strong demand noted in Northern Germany, where scrap was traded at €1,245-1,250 per tonne.

In addition to Germany, the Netherlands and Italy also showed some demand, although not as robust. Despite these price increases, many sellers are wary about the longevity of this domestic demand, indicating that the market could stabilize in the near term due to the mixed sentiment among traders.

Outlook for Nickel and Scrap Prices

The nickel market remains a key factor for stainless steel scrap prices. Despite a recent dip in the price of three-month nickel on the London Metal Exchange (LME), which fell by 2.95% to $15,800 per tonne, traders are expecting the benchmark nickel price to hold steady around $16,000 per tonne for the remainder of the year. This stability is expected to limit any significant upward movement in stainless steel scrap prices.

As traders remain cautious, the mixed sentiment in the market suggests that scrap prices could stabilize or hold firm in the short term, without drastic changes expected in the coming months.

China's Ferro-Nickel Imports Surge in September, Bolstered by Indonesian Supply and Stainless Steel Demand

China's Ferro-Nickel

China’s ferro-nickel imports saw a robust recovery in September 2024, fueled by delayed shipments from Indonesia and heightened demand from the domestic stainless steel industry. Imports totaled 737,358 tons, representing a 41% increase from August and a 13% year-on-year rise.

Indonesian Supply Drives Recovery

Shipments from Indonesia nearly doubled month-on-month to 715,030 tons, thanks to increased production from new capacities, including Nadesico Nickel Industry (NNI) and Shuoshi. These facilities have significantly ramped up their operations, contributing to the surge in supply.

• Nadesico Nickel Industry (NNI): A collaboration between Delong, a leading nickel and stainless steel producer, and CNGR, a major Chinese battery material producer. Located in north Morowali, central Sulawesi, NNI has activated six of its planned eight rotary kiln electric furnaces (RKEF), with a production capacity of 80,000 tons per year in nickel metal equivalent. While primarily producing low-grade nickel matte, NNI can switch to ferro-nickel production based on market conditions.

• Shuoshi: A subsidiary of China’s Zhenshi Group, Shuoshi operates 12 RKEF lines in the Huabao Industrial Park, also in Morowali. With a capacity of 120,000 tons per year in nickel metal equivalent, Shuoshi is a significant contributor to Indonesia’s ferro-nickel output.

Year-to-Date Import Trends

From January to September 2024, China’s total ferro-nickel imports reached 6.41 million tons, a 6% increase compared to the same period in 2023. However, this growth is markedly slower than the 46% surge recorded in the previous year, reflecting a combination of factors:

1. Indonesian Restrictions: Indonesia’s regulatory limitations on pyrometallurgy process capacities have constrained supply growth.
2. Stainless Steel Demand Slowdown: China’s stainless steel sector, a key consumer of ferro-nickel, has faced a deceleration in growth, impacting import volumes.

Outlook

The revival of imports in September highlights the resilience of China’s ferro-nickel market amid fluctuating global dynamics. With new production capacities in Indonesia stabilizing, and the potential for further demand from the stainless steel sector, the coming months will determine whether this upward trend can sustain itself.

Tisco Reduces November High-Carbon Ferro-Chrome Bid Price Amid Surplus Concerns

Northern China’s state-owned steelmaker, Taiyuan Iron and Steel (Tisco), has lowered its tender procurement price for high-carbon ferro-chrome for November delivery. This move reflects a response to oversupply issues and muted demand in the stainless steel sector.

Tender Price Adjustment

Tisco reduced its November tender price on October 17 by 150 yuan/t ($21.10/t) compared to October, setting the price at Yn7,945/t on a 50% chromium basis. This price, equivalent to Yn15.89/kg ($1.01/lb) for contained chromium, includes 13% value-added tax (VAT) and is payable in cash, with shipments scheduled for delivery by December 5.

Market participants suggest that excess supply of high-carbon ferro-chrome has driven Tisco to lower its bid price. There is also speculation that Tsingshan, China’s largest stainless steel producer, may follow suit, with a potential adjustment to Yn8,145/t or Yn16.29/kg ($1.04/lb) for contained chromium.

Oversupply Challenges

From January to August 2024, China’s high-carbon ferro-chrome production reached 5.77 million tonnes, while apparent demand, including imports, totaled 8.74 million tonnes. However, actual alloy demand was only 8.11 million tonnes, leading to a supply surplus of 630,700 tonnes, according to Hunan-based steel mill estimates.

Falling Demand in the Stainless Steel Sector

Stainless steel output in China dropped by 2-2.5% from August to September, with October’s production expected to remain flat or decline by 1% compared to September. This decline has directly impacted ferro-chrome demand, causing a 1% drop in high-carbon ferro-chrome production in September compared to August. October production is expected to decrease further as alloy producers in Inner Mongolia began maintenance in response to falling prices.

Outlook

With stainless steel demand muted and high-carbon ferro-chrome production constrained by maintenance, market sentiment remains bearish. The continued adjustments by major players like Tisco and Tsingshan will be closely watched as the market seeks balance amid persistent oversupply.

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.

Acerinox Reports Decline in Deliveries and Earnings in Q2

Spanish stainless steel producer Acerinox experienced a notable decline in melt shop production and revenues in the second quarter of 2023, largely due to a nearly five-month strike at its Acerinox Europa stainless steel plant. Despite this, the company's earnings showed an improvement from the first quarter, driven by strong performance from its North American subsidiary, North American Stainless (NAS), and its high-performance alloys division.

Acerinox's stainless steel melt shop production plummeted by 17.5% from the first quarter to 384,000 tons, primarily due to the disruption at the Europa plant. For the first half of the year, production dropped by 16% year-on-year to 824,000 tons.

The company's earnings before interest, taxes, depreciation, and amortization (Ebitda) from its stainless steel division more than halved compared to the previous year, standing at €92 million in the second quarter. The January-June Ebitda also nearly halved to €236 million. The strike at Acerinox Europa had a significant impact, reducing the plant's Ebitda by €28 million in the April-June period and by €43 million in the first half of the year.

While there was a slight price recovery in the European market, demand did not meet expectations. Apparent consumption of flat products fell by 7% in May, with inventory levels remaining below the average of recent years. Import pressure decreased, with incoming flat products down by 23% year-on-year from January to May. In contrast, the U.S. market fundamentals remained stable.

Acerinox's high-performance alloys division performed relatively well, with an output of 20,000 tons in the second quarter, slightly down from 21,000 tons in the same period last year. The first half output increased by 3% year-on-year to 42,000 tons. Healthier margins boosted the overall second quarter Ebitda by 12.6% from the first quarter to €125 million.

Looking ahead, Acerinox anticipates continued weakness in the stainless steel market and noted a lack of visibility for the third quarter. However, it expects the high-performance alloys market to remain stable and foresees third-quarter Ebitda to be similar to that of the second quarter, with a gradual recovery of operations at Acerinox Europa.

Europe's Reliance on Nickel Pig Iron to Persist Until CBAM's Full Implementation

ANGLO AMERICAN

Europe’s stainless steel industry will continue to rely heavily on nickel pig iron (NPI) imports until the European Union's carbon border adjustment mechanism (CBAM) enters its definitive phase in 2026. John Eastwood, head of sales for stainless and specialty steel raw materials at Anglo American, confirmed this trend during the Nickel Institute Seminar at LME Week, indicating that Europe’s current scrap shortage and rising material costs have pushed producers to depend on the cheaper, more carbon-intensive Indonesian NPI. According to Jim Lennon, managing director of Red Door Research, from January to July alone, European imports amounted to 10,000 tons of nickel metal content.

The driving factor behind the shift is the increasing cost of raw materials combined with a scarcity of stainless steel scrap in Europe. Even as scrap prices drop, Eastwood does not foresee any immediate changes. He emphasized that only CBAM, the EU's effort to limit carbon leakage, will likely curb this reliance. In its trial phase, CBAM requires European importers to account for CO2 emissions linked to imported goods by purchasing emissions certificates, further affecting the industry’s sourcing strategies.

Industry Facing a Third Year of Decline

The European stainless steel industry continues to struggle. With demand expected to shrink for a third consecutive year in 2025, many flat producers are operating far below capacity. Acerinox, a Spanish producer recovering from a five-month strike, has also committed to using NPI as feedstock. Despite the excess production capacity, profitability isn’t the issue, according to Eastwood. “The problem is excess capacity," he said. Even Acerinox’s market absence barely impacted ferro-nickel sales.

By mid-2025, Eastwood anticipates demand recovery, driven by improved macroeconomic conditions and relaxed monetary policies. However, he highlighted industry criticisms of CBAM, particularly its exclusion of scope 3 emissions and its perceived role as a protectionist policy. "There are many holes in CBAM," Eastwood noted, pointing out inconsistencies such as the inclusion of ferro-nickel but the omission of refined nickel.

Future Projections for Nickel and Freight Costs

Anglo American forecasts the class 1 nickel market to hold surpluses in the coming years, while the class 2 market, including NPI and ferro-nickel, remains balanced or tight. Eastwood predicts stable nickel prices on the London Metal Exchange (LME) through 2025, dismissing any expectations of price spikes. Additionally, high freight costs are likely to limit imports of finished stainless steel into Europe next year, further weighing on the industry.

Aperam’s stainless, electrical steel shipments up in 2Q

Luxembourg-based global stainless steel producer Aperam reported a year-on-year increase in stainless and electrical steel shipments during the second quarter. The company attributed this to the easing of destocking trends in Europe and improved demand conditions. While production in Brazil was positively impacted by seasonal factors, a delay in the ramp-up of a hot rolling mill hindered output.

Total stainless and electrical steel shipments climbed 12% year-over-year to 419,000 tons in the April-June period, with first-half shipments up 8% to 834,000 tons.

"After a challenging period, the destocking trend is finally subsiding, leading to market improvements in European stainless steel," said Aperam CEO Timoteo di Maulo.

The company's stainless and electrical steel segment reported a 14% increase in adjusted EBITDA to €59 million in the second quarter. Although revenues declined 35% year-over-year, this represents a gradual recovery from a steep downturn.

Shipments in Aperam's services and solutions segment surged 30% to 195,000 tons, while scrap metal shipments in the recycling and renewables segment rose 13% to 397,000 tons.

Overall, Aperam's adjusted EBITDA for the second quarter dipped 16% year-over-year to €86 million due to low sales prices and persistent inflationary pressures. However, it improved significantly from the previous quarter. The company anticipates a slight increase in EBITDA for the third quarter compared to the second.