HELSINKI (Reuters) - Finland’s Outokumpu (OUT1V.HE), one of the world’s largest makers of stainless steel, believes the European Commission will come up with safeguard measures next month to protect the industry, its chief executive said.
European steel exports are due to take a hit from President Donald Trump’s move to impose a tariff of 25 percent on U.S. steel imports.
The industry is also worried that the EU will see a surge in imports as steel which would have gone to the U.S. market is diverted to Europe.
“All the steel that has been deflected out of the U.S. is looking for another home. Some of that will come to Europe, and that is our main concern, a big danger,” Outokumpu Chief Executive Roeland Baan said in an interview.
While Outokumpu is set to benefit from the U.S. tariffs — thanks to its operations in the United States and an exemption for Mexico — it has lobbied hard in the EU for safeguard measures.
Baan said he has personally met with Trade Commissioner Cecilia Malmstrom and Vice-president Jyrki Katainen several times.
“We have been very active... We expect that during June the safeguard measures will be announced.”
U.S. tariffs have been postponed on Canada, the EU and Mexico until June 1. Baan said those tariffs looked hard to avoid.
“What I’ve heard up to now is that we’re not very close to have a deal with the U.S.”
Shares in Outokumpu were knocked last month as the company reported a fall in quarterly profits and a weak outlook.
The company has had trouble ramping up its new mill in Calvert, Alabama, which dragged its Americas unit into a quarterly loss.
A recent analyst note suggested that the company was losing patience with the mill and might consider a disposal. Baan denied such thinking.
“United States is the third largest stainless market... to leave that would be strategically foolish.”
Baan said the mill would gather pace as new investments will broaden its product portfolio, while he believed that U.S. customers would start increasing their orders as Outokumpu gains their trust.
Some analysts have their doubts about Outokumpu’s target of 750 million euros (654 million pounds) in core annual profit by 2020, up from 631 million last year.
“For our vision of 2020, we’ve come an extremely long way, we’re further than halfway in terms of our performance. So we will make it by the end of 2020,” Baan said.
Reporting by Jussi Rosendahl; editing by Jason Neely