British Stainless Steel Association hosts Outokumpu.

Juha Rantanen, Outokumpu's new CEO, appointed at the close of 2004, was guest speaker at this year's British Stainless Steel Association lunch held in Sheffield on 13th April.

This closely followed his address to the Annual Meeting of Outokumpu

in Helsinki, on 8th April in which he confirmed Outokumpu's near 100% commitment to stainless steel having shed the last of its historical copper origins when it divested its fabricated copper products business to Nordic Capital in early April. The company, which was established to mine a copper deposit located near the town of Outokumpu in Finland at the turn of the 20th century and later expanded into zinc mining, decided some two years ago that it was not a sufficiently large player in the mining field and hence exited this to concentrate on becoming one of the world's largest producers of stainless steel. The reason for this, said Mr Rantanen, was stainless' attractive growth prospects with output growing 6-7%t annually.

The company has retained its technology division, which reported sales of 423M [euro] in 2004 and made an operating profit of 29M [euro] (or comparable profit of 8.0M [euro]). This contrasts with sales of 4637M [euro] and comparable profit of 425M [euro] for the Stainless Division. The technology division benefits from the sale of former Lurgi technologies following the acquisition of Lurgi's metallurgical plant interests in exchange for Outokumpu's mining equipment interests.

Outokumpu has stainless production facilities in Sheffield, England, Avesta, Sweden and Tornio, Finland. Tornio is very much the largest plant and is located close to chromite deposits at Kemi, mined by Outokumpu, the company's only remaining interest in ore extraction. Output there in 2004 was 1.2Mt ore converted to 580kt of concentrate. This is smelted to ferrochrome at Tornio where it is fed as hot metal to the AODs to provide the chromium alloying requirement for production of stainless steel. The hot metal feed significantly reduces energy requirements and therefore costs.

Much investment has gone into Tornio to increase capacity to 1.65Mt/y of metal production of which 750kt/y will be finished as cold rolled product making it the world's largest dedicated stainless producers (see STI June 04 p56). In March, a new production record was set at the new cold rolling mill (RAP5).

At the local Sheffield plant, a bloom caster was commissioned last year and the slab caster modified to provide the capacity to cast bloom as well as slab. This has reduced Sheffield's dependence on the hot mill at Avesta, which requires the shipment of slab to Sweden and the return of hot coil to Sheffield for cold rolling. All activities at Panteg, Wales have now ceased.

Avesta specialises in the production of wide plate and has a melting capacity of 600kt/y, a hot rolling capacity of 1Mt/y and a cold rolling capacity of 300kt/y. As well as rolling slab from Sheffield, it supplies Nyby in Sweden with hot rolled material. Outokumpu's other major plant in Sweden, at Dagerfors, no longer melts but rolls plate and long product form semis supplied from Avesta and Sheffield accounting for about 170kt of finished product.

On markets, Mr Rantanen said new stainless steel orders were coming in reasonably well and the order backlog as a whole was at a normal level. Demand in Europe has been sluggish, whereas in Asia general market conditions are better. According to consultants CRU, the German market base price for grade 304 declined l00/t[euro] during January-February compared with the December situation (several buyers were seen to be checking their mobile 'phones during the luncheon on a day when nickel prices were tumbling). There are some speculative elements in the buying activity of the European stockists, believes Mr Rantanen, due to high and rapidly changing prices for alloying elements. Outokumpu believes that European customers are currently running down their inventories and this de-stocking phase cannot continue for too long. In spite of this, market fundamentals remain quite healthy, he said.

In response to the weakened market situation in Europe and to maximise profitability Outokumpu has continued to direct its sales from Europe to Asian markets.

Prior to the event, Mark Perrins of Outokumpu (Sheffield) was elected Chairman BSSA for 2005. He replaces Barry Cheetham who actively steered the organisation for four years.

Nigel Ward, who took over the post of Director BSSA last year presented the activities of the past 12 months including the completion of two more modules on the use of stainless steel in the construction industry, bringing the total to nine. He also described changes in the web site (www.bssa.org.uk) to make it more accessible. The site received 1.5 million hits during the year and 50000 pages of articles were downloaded.

Mark Perrins of Outukumpu (Sheffield) was elected Chairman BSSA for 2005

[L to R] Mark Perrins the new Chairman of the BSSA, Nigel Ward the Director and Juha Rantanen, Managing Director of Outokumpu Distribution