Pia Aaltonen-Forsell, chief financial officer (CFO) of Finland-based stainless steel producer Outokumpu, in which more than half of its energy consumption is electricity, has stated that the company’s production operations are running normally despite rising energy prices.
Saying that the company is currently optimizing its ferrochrome production, Mr. Aaltonen-Forsell stated that the impact of the optimization of the company’s ferrochrome production in its other operations has been limited and that its stainless steel production is at a normal level. The company has several mills in Europe, so it can switch stainless steel production from one mill to another because of local energy restrictions, if needed.
The company’s CFO noted that, if there were disruptions in energy availability or if the electricity price kept rising for a longer time, impacts on Outokumpu’s production would be possible. Outokumpu expects energy costs to increase in the third quarter and to impact especially negatively the ferrochrome business.
Meanwhile, at the end of the last year Outokumpu signed three long-term wind power contracts that correspond to a significant part of the electricity consumption at its sites in Kemi, Finland, and in Germany.
The situation in the European energy market is worrisome for both private consumers and companies. Outokumpu is not the only one facing this challenge, as most European companies are under pressure from the recent increase in global energy prices, especially with the effect of the war between Russia and Ukraine. Spain-based ArcelorMittal Sestao, a subsidiary of Luxembourg-headquartered steel giant ArcelorMittal, has delayed the resumption of the electric arc furnace at its Acería Compacta de Bizkaia plant until further notice and higher energy costs are one of the reasons for the delay, as SteelOrbis previously reported.
Higher energy prices are also an obstacle for the green transition of the steel industry as the electric arc furnace production route has lower emissions than the blast furnace production route.