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Q3 operating earnings SEK 6.59 billion

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Adjusts Q3 output of construction-related products in Europe

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To bring forward maintenance at blast furnace in Finland

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Has good order book for fourth quarter

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Shares down 1%

Oct 25 (Reuters) - Swedish steelmaker SSAB will cut capacity in Europe in the fourth quarter by bringing forward maintenance work, seeing uncertainties over demand and a risk of low activity towards the end of the year, it said on Tuesday. Chief Executive Martin Lindqvist said on a conference call it was a "million dollar question" as to what deliveries will look like in the second half of December, especially between Christmas and New Year, adding it remains to be seen whether companies use the opportunity to take outages due to high energy costs. He noted however that SSAB had a good order book for the fourth quarter. The specialized high-strength steel producer said it had adjusted output volumes of construction-related products in the third quarter in Europe to adapt to the weakening market. To reduce capacity in the last three months of the year, the company will bring forward maintenance at a blast furnace in Raahe, Finland, to mid-November from an original plan of sometime around end 2023 or early 2024.

"The timing is good to do it," Lindqvist said.

The outage will last between six and eight weeks, the group said.

Lindqvist said a transformation plan for fossil fuel-free steel production is on track, though the transition requires sufficient availability of fossil fuel-free electricity, which is a challenge in Sweden.

The group will continue to push for a level playing field for state aid with the new Swedish government and the Finnish government, as well as on a European level.

In September, SSAB started its first fossil fuel-free steel partnership in the United States, aiming to deliver to market at commercial scale during 2026.

In terms of energy, Lindqvist said the group produces roughly 50% of what it consumes and electricity makes up for around 3% of the group's total costs.

The company said it expected European shipments in the fourth quarter to be steady, albeit at a low level.

While the outlook for its other two divisions, Special Steels and Americas, is stable, it forecast lower prices for all its units.

The group, which also reported better-than-expected third-quarter operating earnings of 6.59 billion Swedish crowns, has seen record profits over the past year on the back of surging steel prices and strong output at its production plants in Sweden, Finland and the United States.

Its shares were down 1% in early afternoon trade. ($1 = 11.1642 Swedish crowns)

(Reporting by Jagoda Darlak and Agnieszka Gosciak-Rabalska; Editing by Kirsten Donovan and David Holmes)