Finland-based stainless steel producer Outokumpu has posted an operating loss of €89 million in its financial results for the third quarter of this year, due to weakening global demand and lower nickel prices. The company had registered operating losses of €53 million and €80 million respectively in the first and second quarter of this year.
The company's sales for the July-September period decreased to €974 million, compared to €1.25 billion in the second quarter and €1.23 billion in the first quarter, as the base price of stainless steel declined to €1,155/mt and the company's stainless steel deliveries dropped to 325,000 metric tons in the period in question, compared to a base price of €1,182/mt and a delivery volume of 380,000 metric tons in Q2.
Commenting on result, Outokumpu CEO Mika Seitovirta said, "Outokumpu's third quarter developed in-line with our expectations with profitability remaining at unsatisfactory levels. The beginning of the quarter was seasonally slow but customer activity picked up in September. Seasonality and continued economic and nickel price weakness resulted in lower volumes and prices for the quarter. The oil and gas customer segment was one of the few customer segments in which we continued to see solid activity. Most other end-use segments were affected by the weak economy, especially in Europe"
Outokumpu expects demand for stainless steel to grow slightly in the fourth quarter as a result of normal seasonality. No visible recovery among investment-driven end-use segments has taken place and distributor inventories are currently estimated to be below normal levels, the company said.
Outokumpu's average base prices for stainless steel in the fourth quarter are expected to be approximately at the same level as in third quarter, while the company's fourth-quarter external delivery volumes (stainless and ferrochrome) are predicted to be at the same level or slightly higher than in the third quarter.