Outokumpu unveils new vision Stainless Steel Products and Pricing Model

Outokumpu, the global leader in stainless steel and high performance alloys has unveiled its latest addition to the duplex stainless steel product family, the FDX platform, introduced a new pricing model and commented on its strategy progress.

The new FDX stainless steel product exhibits a unique combination of price stable alloying with high strength and substantially improved formability. FDX is a totally new stainless steel material solution for applications where the formability of current duplex grades has not been sufficient. Like all duplex grades, FDX platform delivers significant material savings and lifecycle advantages compared to traditional stainless steel grades.

The FDX family comprises of two product variants: FDX 25 and FDX 27 having corrosion resistance and formability properties similar to 304 and 316 stainless steels respectively, but twice the mechanical strength.

"Our vision - a world that lasts forever - is based on our conviction that the world deserves innovations that can stand the test of time and are ready to be born again at the end of their life cycle. Our materials are vital in enabling a sustainable world with economic prosperity, and so it is our mission to create advanced materials that are efficient, long lasting and recyclable." Says Outokumpu CEO Mika Seitovirta.

"Its characteristics make FDX grades well suited for applications with high demands on formability such as plate heat exchangers, flexible pipes and pumps, where strength, formability, durability and long-term service are required. The new grades complement Outokumpu's already strong duplex offering: Outokumpu is the global market leader in duplex grades with a global market share of more than 40%." Said Seitovirta.

Outokumpu plans to introduce an additional stainless steel pricing model -the Daily Alloy Surcharge that would build on the traditional Monthly Alloy Surcharge mechanism. The new Daily Alloy Surcharge model is designed to address the weaknesses of the monthly model as it would react far quicker to changes in the volatile alloy costs.

Says Mika Seitovirta: "We want to investigate potential new pricing models that would address the shortcomings of the current monthly model while maintaining its benefits. The daily alloy surcharge mechanism is a method well tested in other industries, such as aluminium, where customers benefit from daily pricing offered by the producers. In regions such as Asia-Pacific, stainless steel manufacturers already give daily full transaction prices to their customers."

Outokumpu believes that a Daily Alloy Surcharge would decrease volatility and speculation and thus provide better delivery reliability for customers. Outokumpu's customers would potentially also have the flexibility to decide whether to fix the Alloy Surcharge on the day of the order or only closer to the delivery time. Exact details of the planned model will be developed further based on the customer feedback and findings.

Source : Equity Bulls

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