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Outokumpu Makes Plans to Begin Increasing Production Capability
06/26/2009 - Outokumpu announces plans to increase its production capability based on evidence of some recovery in order intake.
Outokumpu has announced plans to increase its production capability based on evidence of recovery in order intake for deliveries following the summer vacation period.
Outokumpu said that its order intake for stainless steel had increased somewhat over the past few weeks as compared to the earlier very low levels. The company believes the reduction of inventories by distributors and end-users may have ended, and that the increase in the nickel price has likely triggered some purchasing activity.
The company cautioned, however, that there are no signs of recovery in the underlying demand for stainless steel.
The company cautioned, however, that there are no signs of recovery in the underlying demand for stainless steel.
Outokumpu, which has been operating at about 50-60% capacity utilization through the first half of 2009, says it will now begin to adjust production capability to allow for some recovery in delivery volumes in the fourth quarter. The company said it does not plan to return to full production capacity at this stage, as third quarter delivery volumes are expected to remain at depressed levels due to capacity constraints and maintenance shutdowns.
The company said it will adjust the temporary layoffs that had been scheduled for some 700 employees at the Tornio in Finland. The meltshop, which is currently idle, will start production one month earlier than planned and the employees will be back at work from the beginning of September. Working shifts at the steel production lines will be increased and the extent of temporary layoffs will be reduced accordingly.
The company noted that the fixed-period temporary layoffs for its Kemi Mine and Ferrochrome Works would continue until October as planned. The part-time temporary layoffs for maintenance and support functions employees will be implemented as planned, with needs to be reviewed on a quarterly basis.
Tornio Works in Finland employs 2350 people, about 1800 of whom have been impacted by the fixed-period or part-time temporary layoffs since April.
