Last autumn’s financial crisis brought the world’s economy to an abrupt halt. This even affected the real economy negatively, with rapidly falling demand as one result. Decreasing prices for raw material plus alloy surcharges meant that our distributors exercised caution when building up stocks. We are currently seeing raw material prices stabilize. Several prognoses of price development during 2009 as a whole point to an average nickel price around 11,000 USD/t.

Projects presently constitute the majority of our business. It’s an advantage that most of our customers operate in structurally-important segments with major investment needs. Nevertheless, difficulties with project financing have meant that even here we have noticed a market decline with tougher competition among suppliers as a result. Demand for stainless pipes and fittings can receive a welcome boost from the planned support programs announced by several countries. These often include large infrastructure projects. Such measures should also have a positive effect on investments in maintenance.

At the same time, a tougher market opens the way for new solutions. We feel that Outokumpu’s purposeful focus on special steel grades has come at just the right time. Interest for more cost-effective solutions is clearly growing, and this is exactly what our Duplex steel qualities provide. Their higher strength permits thinner wall dimensions, thereby reducing consumption of material. Thinner walls also mean less on-site welding, at the same time as the reduced weight simplifies handling.

To be able to offer better availability for Duplex steels, we are currently building up our stock of pipes and fittings for the most popular grades. This process will be completed during the first half of this year.

We are continuously working hard to strengthen our customer relations and improve our service. The prevailing business climate makes us more determined than ever to succeed.

Johan Askaner, Vice President – Sales & Marketing