*Oct 21, 2010 (Dow Jones Commodities News via Comtex) -- *By Devon Maylie Of DOW <http://futures.tradingcharts.com/chart/DJ/M> JONES NEWSWIRES
LONDON (Dow Jones)--Stainless steel imports, largely from Asia, are more than double from last year and continue to tick higher each month and that will force European producers, already struggling with overcapacity, to become more cost competitive, Finnish stainless steel producer Outokumpu Oyj (OUT1V.HE) said Thursday. "Imports are increasing from month to month," an Outokumpu spokeswoman told Dow Jones Newswires. "U.S. dollar weakness makes Asian exports less expensive." Overall imports are near the high reached in 2006-2007 after slumping last year due to a general drop in global demand. "What is different now is that we didn't have an overcapacity problem in 2007, as we do now; then we had a shortage of material," the spokeswoman said. "We will have to take care of our cost competitiveness." Stainless steel producers have struggled in Europe. The market is shared roughly equal by Outokumpu, ArcelorMittal (MT), ThyssenKrupp AG (TKA.XE) and Acerinox SA. Imports account for the equivalent of about one of those producers right now, Outokumpu said. Outokumpu is currently operating at 75% of capacity. Overcapacity in Europe is forcing companies to make changes. In July ArcelorMittal said it was assessing spinning its stainless steel division off as a separate entity. Analysts said market consolidation is necessary but it has yet to happen. Outokumpu said it's focusing on costs and taking efforts to reduce them. For example, it has a stake in the Finnish Fennovoima nuclear power project. "In energy we have long-term initiatives ," the company said. "We don't see why the Chinese should have a natural competitive advantage."
