Finnish steelmaker Outokumpu has announced that the technical issues experienced during the past six months in all three cold rolling (CR) lines at its stainless steel mill in Calvert, Alabama, US, has had a negative impact on customer deliveries and increased costs. The steelmaker said that, following the damage calculations and discussions with the insurance company, the cost impact of the incident is estimated at €34 million in 2014 which will still be partly covered by insurance this year.
Outokumpu will record non-recurring costs of about €20 million in the fourth quarter in the Coil Americas business area. This amount consists of costs not covered by the insurance as well as costs for which the insurance coverage cannot be recognized in 2014. Compensation for part of these costs is expected to be received in 2015.
The company said that, while two of the cold rolling mills have been back in operation after repair work done in August, the 54 inch cold rolling line in Calvert is now expected to be back in operation only in the beginning of 2015 after an outage since June 2014.
Outokumpu confirms the negative impact for deliveries at about 35,000 mt in 2014. As indicated in early November, the operating environment for stainless steel has been lackluster with volatile nickel prices and especially the distributor sector has continued to push out orders to next year. While order intake for the start of 2015 remains healthy, Outokumpu expects delivery volumes in the fourth quarter to be lower than originally estimated.