Outokumpu: Don’t Go West, Go Wide!

Outokumpu has a competitive advantage that it hasn’t capitalized on and given the state of the stainless market, we, quite frankly, can’t understand why.

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Outokumpu appears to be the only mill in North America that produces cold-rolled stainless steel 72 inches wide. But we’re not sure if anybody really knows that.

Outokumpu produces 72-inch-wide stainless, reducing the need for welders.

The US market for 72-inch-wide material has been historically served by imports from Outokumpu, Aperam and Tisco.

The Marketing Path is Well Paved

Outokumpu need not reinvent a marketing strategy to sell 72-inch-wide products. They only need to look at one of their direct competitors, North American Stainless.

In fact, Outokumpu ought to adopt the NAS strategy for 60-inch wide.  Let’s flash back in time to about 25 years ago. Nobody used 60-inch-wide material.  60-inch wide was sold at a premium above 48-inch wide. It made sense for NAS to sell 60-inch wide at the same price, or even a cheaper price, as it optimized the full width of its rolling mills. Once the price difference went by the wayside, there were no penalties for buying wider material. Guess what? The market took off. Outokumpu should be deploying the same strategy.

It’s a Big, Wide Market

The market for 72-inch wide remains untapped. As I visited customers while working for a service center, I became interested in how many had wide lasers or other processing equipment. Other markets such as carbon steel and aluminum use wide material. I saw that many customers had invested in new wider equipment. My hypothesis: I don’t think many buying organizations really know that 72-inch-wide material is produced domestically.

That domestic capability ought to attract the attention of large cold-rolled stainless steel buying organizations.

Instead of stainless mills fighting for the same piece of pie, they need to focus on their respective competitive advantages.  Outokumpu ought to be filling one of its three cold-rolling mills with 72-inch-wide orders. We just haven’t seen much promotion of this capability. The same holds true for Allegheny Technologies. Although Allegheny’s hot-rolling mill can go to 78.74-inch-wide, none of their cold-rolling processes are built around it. So, the best they can offer is to be an alternative for 60-inch wide, which in itself is not a bad thing. From a buyer’s perspective, competition is always good.

What This Means for Buyers

Wider is definitely better when it comes to welding. Wider widths help to reduce the number of welds needed. The last time we checked, welders were in short supply.

It’s pretty simple, Outokumpu: get rid of that premium and start making it attractive for people to buy your products. We’re pretty sure that will help fill that mill!

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  • Hello Katie! I completely agree. The 72″ wide item from a utilization standpoint is Outokumpu Stainless USA’s lowest cost item, yet they maintain the arrogance and pretense to charge a premium. Granted, they do struggle at times to produce it, but long term they should be aggressive and develop the market. They should take a chapter from NAS’ book. I remember at one point in time NAS had a lower width extra on the 60″ wide versus the 48″ wide. What better way to get the market to move than to lubricate it with a few dollars. Many processors and producers already have the capability to handle wider product, so that aspect isn’t really holding them back. Once end users see that there is no cost premium they will adapt quickly.


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