By Alessandro Parodi
(Reuters) -At least a third of surveyed companies have paused or delayed stainless steel orders because of U.S. import tariffs of up to 50%, while more than half are reassessing their sourcing strategy, Finnish steelmaker Outokumpu said on Monday.
Outokumpu President and CEO Kati ter Horst told Reuters the slowing global demand means current European Union import quotas are too high, and that she expects the European Commission to announce in October measures to curb imports of steel from rivals to protect domestic producers.
The measures will replace current safeguards due to end next summer and might come into effect even a quarter earlier, she added.
WHY IT MATTERS
A third of businesses switched steel suppliers as of May, while the addition in August of hundreds of derivative products to the U.S. list of goods subject to the levies created uncertainty for equipment and machinery buyers, ter Horst said.
Outokumpu operates the only mine in Europe and North America that extracts chromium, a critical mineral used in stainless steel and exempted from U.S. tariffs.
It has developed a low-emissions alloy containing 99% chromium, compared with 53% previously, and plans to scale up production to one ton a day in an upcoming pilot plant, from one kilo currently, ter Horst said.
CONTEXT
EU lawmakers expect import quotas and the CBAM mechanism, imposing costs at the EU border on the CO2 emissions embedded in imported steel to help decarbonisation, after green steel projects around Europe have been delayed or canceled due to worsening demand and high energy costs.
Ter Horst said that long term stainless steel trends remain positive as buyers, hoping to reduce a combined $2.5 trillion a year in corrosion costs and meet climate targets, see the material as more sustainable and stronger than normal steel.
Growing defence spending also supports the trend, she said.
(Reporting by Alessandro Parodi in Gdansk, editing by Chizu Nomiyama)
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