REFILE-Aperam fire to benefit other EU stainless steel makers

Tue Jan 8, 2013 1:13pm EST

(Deletes extraneous words in headline, no change to text)

* Gueugnon plant fire to tighten market in Europe

* Finnish producer Outokumpu likely to benefit the most

NEW YORK, Jan 8 (Reuters) - A fire affecting output at a French Aperam stainless steel plant will benefit Outokumpu and other European producers and will put upward pressure on European prices in the next few months, market players said this week.

Europe's third largest stainless steel maker, Aperam, said last week that a fire at its Gueugnon plant, in eastern France, damaged a main processing line and will affect production until at least the second quarter.

The Gueugnon plant is a major European supplier of stainless steel flat products, used in everything from automotive to home appliances. It produces about 350,000 tonnes a year of finished stainless steel products.

"As a consequence of the Aperam fire we expect to see short supply of cold-rolled products in the market in the next few months," a southern European stockholder said.

"We will likely see more imports and some price increases in February and March. Outokumpu will probably be the biggest beneficiary and Acerinox and other European producers might benefit too."

Aperam said it was looking for alternative sources of semi-finished products so that it can continue to produce finished products at the Gueugnon plant.

Some of this supply will likely come from European competitors such as Inoxum, a unit from Germany's ThyssenKrupp , which Finnish producer Outokumpu acquired last year, market sources said.

Supply tightness and some seasonal restocking should support stainless steel prices in the next few month after prolonged weakness seen in the second half last year. (Reporting by Silvia Antonioli; Editing by Bob Burgdorfer)