THE stainless steel industry is facing “a challenging short-term outlook” but demand will continue to grow in the long term, according to the CEO of Finnish steel giant Outokumpu Group.
Mika Seitovirta, who is also president of Outokumpu, the largest stainless steel maker in the world, said that global megatrends such as urbanisation, increased mobility and the demand for food, energy and water, will ensure continued growth of stainless steel consumption in the future.
“We are living as if there is another planet at our disposal,” Mr Seitovirta told an audience in South Yorkshire. “By 2030, even two planets won’t be enough to sustain our consumption.” But he said that “unfortunately the weak economic outlook will continue in Europe this year”.
He was speaking in Sheffield as part of a conference celebrating 100 years since Harry Brearley discovered stainless steel.
Earlier this year, Outokumpu, which employs 16,200 people, said it expects to reduce up to 2,500 jobs globally between 2013 and 2017 as part of efforts to reduce its operating expenses and return the company to profitability. Outokumpu said that its 2012 financial year was marked by “a weak market environment”, especially during the second half, leading to an underlying operational loss of 168 million euros.
The business has production facilities in Sheffield, as well as across the globe in Finland, Sweden, Germany, the United States, Mexico and China, together with sales offices in 73 countries around the world.
On the Sheffield site, Outokumpu has a meltshop, rod mill and bar finishing facilities, altogether employing approximately 600 people.
Speaking in Sheffield this week, Mr Seitovirta said that industry overcapacity has resulted in the continued decline of stainless steel base prices, Asia imports to Europe and low utilisation rates, while conversion margins have declined.
None of the European stainless steel producers are profitable, he said, but he added that “this will not continue forever”.
He told the Yorkshire Post that in the case of Outokumpu, its recent acquisition of stainless steel company Inoxum from competitor ThyssenKrupp will help it achieve synergies which it can deliver by “closing down capacities in Germany, reallocating volumes, and through that getting higher utilisation rates from our most efficient entities”.
He told the audience that growth in the stainless steel sector would come in the long-term future through increased scale of production, new technologies, reduced cost and prices, as well as demand growth for its use in new applications.
Mr Seitovirta added that the stainless steel industry would benefit from “a huge demand” in renewable sources.
He said that stainless steel is today used in almost all industries from petrochemical to oil and gas to nuclear, citing its anti-corrosive, hygienic, heat resistant, high strength and aesthetic qual- ities.
Its aesthetic appeal is “sometimes overlooked”, he said, giving Birmingham’s New Street Station as an example of its ability to exude “timeless beauty”.
Mr Seitovirta also said that stainless steel is 100 per cent recyclable.
He added: “At Outokumpu, we believe that some things should last forever and at the end of the lives of the products they really can go back into the production cycle to make new stainless steel products.
“That’s our vision, to have a world that lasts forever.”
Speaking to the Yorkshire Post, he said: “If you take whatever of the big megatrends in the world from the climate change to urbanisation, or mobility of the people or urbanisation…, it means we need more and more recyclable materials, advanced materials, which are helping us with the resources of the planet that’s not going to be enough.
“And here stainless steel as an advanced material has a purpose.” Mr Seitovirta joined Outokumpu two years ago.
The centenary lecture was part of an international conference and exhibition in Sheffield, hosted by the British Stainless Steel Association and the Sheffield Metallurgical and Engineering Association.
The conference formed part of the City of Sheffield’s celebrations to mark the 100th anniversary of the discovery of stainless steel.
It’s all thanks to Harry…
HARRY Brearley is credited with making the first stainless steel in his home city of Sheffield in 1913.
Brearley was responsible for the research department at the Brown Firth Laboratories. Whilst working on alloy steels for the manufacture of gun barrels in October 1912, he made a series of steels varying in chromium content from six to 15 per cent.
He found that low carbon steels with above 12 per cent chromium did not corrode. It was on August 20, 1913 that he made the first arc furnace cast of stainless steel. This gave new life to the steel industry in Sheffield. Events are being held this year to mark the achievement.
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