Due to exceptionally high energy prices and an unstable energy market, stainless steel producer Outokumpu has decided to postpone the restart of one of its three ferrochrome furnaces after a planned maintenance break.
The maintenance break will start on September 7, and the restart was originally scheduled for week 40. Ferrochrome production will continue at approximately 70 percent of full capacity.
Negative cost competitiveness
“Energy prices have increased significantly, which has negatively impacted our cost competitiveness compared to our non-European competitors. We hope that decisive action will be taken at both EU and national level to stabilize the energy market.
We are monitoring the situation very closely and hope that politicians will play an active role in normalizing the framework conditions,” says Martti Sassi, President of the Ferrochrom Business Area. “We have already optimized our ferrochrome production by not producing at the highest hourly prices to avoid the worst price spikes, as previously communicated. The decision to postpone the restart of one of our furnaces is a continuation of the optimization of ferrochrome production.”
In Finland, the Olkiluoto 3 nuclear power plant plays an important role in stabilizing the electricity market. It is crucial for a stable energy market that operations resume this year. At European level, Outokumpu consumes 4 TWh of electricity, which is almost equivalent to the total electricity consumption of Helsinki, the capital of Finland.
Stainless steel deliveries at normal level in the third quarter
Despite the decline in Outokumpu’s ferrochrome production, the company’s stainless steel production will remain at the same level as forecast in the January-June interim report. These measures will not affect our customer deliveries or the financial outlook for the third quarter. The company plans to comment on the fourth quarter outlook in conjunction with its Q3 results on Nov. 3.
Ferrochrome is an alloy between chromium and iron and is an essential raw material for the production of stainless steel. Ferrochrome production consumes more than 50 percent of Outokumpu’s total electricity consumption in Finland.