Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Commodities Market Little Help for Metal Industry, Solidium Says

Oct. 1 (Bloomberg) -- The commodities market will offer scant relief to metal producers struggling with overcapacity and low prices in the coming months, according to the head of Finland’s equity-asset manager.

Outokumpu Oyj, Rautaruukki Oyj and Talvivaara Mining Co. must continue adapting themselves to low steel and nickel prices, Kari Jaervinen, managing director of Solidium Oy, which owns stakes in all three companies, said in an interview in Helsinki today.

“These companies must themselves act to reach profitability in all environments,” Jaervinen said. “Nickel price pressures will remain and the general economic situation causes commodity prices to develop with moderation.”

Slow global growth has damped metal prices in the aftermath of the financial crisis. Nickel, used in stainless steel, tumbled into a bear market in May and is set for a third yearly loss. European steelmakers are struggling with excess supply as imports from Asia worsen a supply glut amid waning demand from automakers and builders.

Even so, speculation is premature that the super cycle, or longer-than-average period of rising prices, in commodities is ending, McKinsey & Co. said Sept. 26. Solidium has during the past year increased holdings in Finnish mining-equipment makers Metso Oyj and Outotec Oyj, betting on construction industry demand picking up in developing markets including China and Southeast Asia.

Solidium is the biggest owner of special-steel maker Rautaruukki with 39.7 percent of shares. It holds a 21.8 percent stake in stainless-steel maker Outokumpu and 16.7 percent of nickel producer Talvivaara.

The long-term outlook for the metal producers is more favorable, Jaervinen said.

“Urbanization will remain such a strong cyclical force for the next decade that outlook on minerals remains positive,” he said.

To contact the reporter on this story: Kasper Viita in Helsinki at kviita1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.