Outlook and risks

Outokumpu gives quarterly outlook and reviews short-term risks and uncertainties in its interim reports. More detailed information about our material risks and risk management is in our Annual Report. 
Page last updated: 25 Mar 2024

Outlook for Q1 2024

On March 11 and on March 21, due to the continued political strike in Finland, Outokumpu downgraded its guidance for Q1 2024. After the latest downgrading, adjusted EBITDA expected to be lower compared to Q4 2023. 

As a result of the political strike, The total negative impact of the three weeks’ political strike on Outokumpu’s adjusted EBITDA is estimated to be approximately EUR 65 million of which approximately half is expected to be realized in the first quarter and the remaining in the second quarter. Also, due to the same reason, Outokumpu’s stainless steel deliveries in the first quarter of 2024 are expected to be slightly lower compared to the fourth quarter of 2023.

Updated outlook and guidance for Q1 2024

Outokumpu’s adjusted EBITDA in the first quarter 2024 is now expected to be lower compared to the fourth quarter of 2023, and Outokumpu’s stainless steel deliveries in the first quarter of 2024 are expected to be slightly lower compared to the fourth quarter of 2023.

Other elements in the outlook for the first quarter 2024 besides deliveries and adjusted EBITDA guidance have remained the same:

  • Market environment started to weaken at the end of the fourth quarter for business area Americas, and in Europe, a slow recovery is expected to continue. Also, scrap market has recently tightened.
  • Ferrochrome production is running at 80% of its full capacity as one of the three ferrochrome furnaces and one of the two sintering plants were closed in January 2024 due to weak ferrochrome market conditions.  
  • Maintenance costs in the first quarter are expected to decrease by approximately EUR 20 million compared to the fourth quarter.  
  • With current raw material prices, some raw material related inventory and metal derivative losses are expected to be realized in the first quarter.

Earlier outlook and guidance for Q1 2024

Before March 11 and March 21, Group stainless steel deliveries in the first quarter was expected to increase by 5–15% compared to the fourth quarter. Adjusted EBITDA in the first quarter of 2024 was expected to be at a similar level compared to the fourth quarter.


Short-term risks and uncertainties

Outokumpu is exposed to various risks and uncertainties that may have an adverse impact on its business and operations. The adverse development of the global economy, geopolitical conflicts including the Israel-Hamas war, the recent tension in the Red Sea and the continued war in Ukraine have increased the risks and uncertainties to which Outokumpu is exposed. However, the company has taken prompt measures to manage and control these risks.

The main uncertainties relate to inflation, slow growth in China, geopolitical conflicts that could disrupt global supply chains, energy prices and the slowdown of the global economic growth. All these adverse consequences could impact Outokumpu's operating environment, business, and stainless steel demand.

Throughout 2023, electricity prices have declined but the uncertainties in volatility and price peaks remain and may expose Outokumpu to increased energy costs. During the fourth quarter, the main driver of the volatility in the electricity prices in the Nordics was the cold
weather and the limited wind and hydro balance availability. Possible increases in the price of electricity would mainly affect business area Ferrochrome, due to the high amount of electricity needed in ferrochrome production. The activities implemented in relation to electricity optimization are enabling mitigation of peaks in spot market electricity prices and for 2024, Outokumpu’s energy portfolio has been hedged with roughly two thirds of the estimated consumption.The nuclear power plant Olkiluoto-3 in Finland continued to balance the electricity market in Finland with good electricity availability.

Gas availability in Germany remained sufficient during the fourth quarter with limited uncertainties for the remaining winter period. The uncertainties over gas are mainly related to increased energy price sensitivity to adverse events in the geopolitical situation, especially developments in the Middle East. Any severe disruption or possible further sanctions in the natural gas supply could affect the prices or availability of gas for Outokumpu’s operations in Europe. Outokumpu acquires energy gases from the European market, for which Russia is one of the indirect suppliers.

Outokumpu does not purchase any scrap or nickel of Russian origin for its operations. The risk of possible disruptions in its raw material supply chain due to sanctions is considered to be limited. At the end of 2023, indirect supply from Russia still exists for a very limited amount of raw material, and the company is demanding that its supplier finds alternative sources globally. The company remains exposed to risks related to volatile metal prices, especially nickel. Volatile metal prices may impact Outokumpu’s result, among other financial risks. 

In addition, cyber security threats and dependencies on critical suppliers expose Outokumpu to the risk of operational disruptions and additional costs. In the fourth quarter, Outokumpu announced that with respect to its critical supplier dependency in the US it has successfully extended the existing hot rolling agreement with its current partner AM/NS on mutually acceptable terms until October 1, 2051. The contract is subject to prior written notice of four years, with the earliest effective termination date being October 1, 2042.

The EU safeguard measures, renewed in June 2023 by the European Commission, are in place until June 2024 which decreases the risk of a sudden import surge. In August 2023, the anti-circumvention investigation on cold rolled stainless steel from Indonesia was initiated and this has decreased the risk of imports from Taiwan, Turkey, and Vietnam.

Outokumpu Oyj has been joined in arbitration proceedings over a dispute between Fennovoima and Rosatom entities related to the termination of the EPC (Engineering, Procurement and Construction) contract. Outokumpu disputes the existence of any contractual relationship, obligation, or arbitration agreement between Outokumpu and any Rosatom entity.


Find out more information on Outokumpu’s material risks and risk management in our Annual report.

Find out more

Read more on our operating environment and long-term outlook, dividends and risk management.

Operating environment
Dividend policy
Risk management at Outokumpu