| April 2005 |  |
| Metal Industry News | |
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Gary
Works Furnace Rebuild to Take 91 Days The
furnace was built in 1974 and relined in 1991. Upon completion of
the rebuild, this blast furnace will be capable of producing 9,200
tons of hot metal per day at 97.5 percent availability for 20 years.
No. 13 today produces 7,045 tons of hot metal a day. The rebuilt
furnace will have many technological upgrades and will be renamed
No. 14 in recognition of its new status. The
project will require the skills of approximately 700 craftsmen,
U.S. Steel reports. “This
financial investment demonstrates our commitment to our workforce,
our customers, and the community we have called home for almost
100 years,” says Gary Works General Manager Ray Terza. “This
major rebuild of the No. 13 blast furnace will ensure that Gary
Works remains our flagship operation in the United States.” George
Babcoke, managing director-engineering and research for U.S. Steel,
says the project is the largest single capital investment the company
has made since the early 1990s, when the greenfield construction
of its joint venture PRO-TEC Coating Co. began in Leipsic, Ohio. The
No. 13 blast furnace accounts for about 45 percent of the iron produced
at Gary Works. In order to meet customer needs during the outage,
U.S. Steel is stockpiling inventory at Gary Works and will support
customers from its other domestic facilities. U.S.
Steel does not anticipate any layoffs during the project. Bankruptcy
Court Authorizes Stelco to Access Capital Markets At
a March 30 hearing, Ontario’s Superior Court of Justice discontinued
the previous capital raising process for the company’s integrated
steel business and authorized Stelco, with the assistance of its
advisors, to seek to raise new money in the capital markets. Hap
Stephen, Stelco’s chief restructuring officer, says the company
believes that capital markets will provide the money needed to fund
key projects, support a restructuring plan, and facilitate emergence
from bankruptcy. The
amount of capital Stelco is able to raise will be determined, in
part, by the markets’ views of its restructuring plan and its
prospects, including resolution of pension liabilities. Stelco will
continue talking with key stakeholders to seek a level of consensus
concerning a restructuring plan that will support its capital-raising
activity. Inland
Accelerates Maintenance Outages The
No. 6 blast furnace, which typically produces iron at the rate of
2,500 tons a day, has been “blown down” and cooled so
that the furnace can be gunned with additional refractory material
to extend the life of its refractory lining. The
plant continues to operate the like-sized No. 5 blast furnace and
the 11,000-tons-per-day No. 7 blast furnace during the outage. Inland
is also accelerating planned maintenance that was scheduled for
later this year at the 80-inch hot-strip mill through a series of
staged shutdowns. This will temporarily reduce production capability,
but will prepare the line for greater production later in the year
when demand is expected to be stronger. “While the economy remains strong, there is currently excess inventory in the system,” says Michael G. Rippey, executive vice president, commercial, and chief financial officer. “Considering both current demand and likely demand later in the year, we decided it was better to do this work now.” Kaiser
Reports Loss, Though Operating However
the 2004 results included a non-cash pre-tax operating charge of
$793.2 million, nearly all of which is related to resolving various
matters in the company’s Chapter 11 case, specifically the
termination of the company’s pension and post-retirement benefit
plans and a related settlement with the United Steelworkers of America.
Kaiser
President and CEO Jack A. Hockema says that company leaders “were
pleased with the operating performance of our fabricated products
operations in 2004. In particular, operating income for this business
increased sharply compared to the operating loss of 2003.”
The
year-over-year improvement was due primarily to improved demand,
which resulted in increases in shipments and higher average realized
prices. Similarly, the operating results for fabricated products
in the fourth quarter of 2004 improved dramatically from those of
the year-ago quarter. Shipments
were especially strong in the fourth quarter of 2004, particularly
for aerospace and automotive products, Hockema says. The quarter-over-quarter
increase in average realized prices was partially attributable to
product mix, with individual product lines displaying varying levels
of recovery from their recessionary lows of the past several years. “Kaiser is making steady progress in resolving our remaining Chapter 11 issues, and we expect that the company will emerge from Chapter 11 in the second half of 2005,” Hockema says. W-P
Steel Launches Hot-Strip Mill Project The
automatic roll changers will be installed on the mill’s six
finishing stands, reducing the time needed to change rolls from
as much as 40 minutes to less than 10 minutes per roll change. On
average, rolls are changed between four and six times during each
24 hours of operating time. “This
is another step in our program to improve the efficiency of our
primary operations,” says Harry L. Page, president and chief
operating officer. In
2000, the company added segments to its twin-strand caster, and
productivity increased. The current addition of an electric arc
furnace will improve steelmaking productivity. The
automatic roll changers will allow the company to roll a full output
from the caster, and provide an opportunity to convert purchased
slabs or toll roll slabs for others, Page says. The majority of the roll changer installations will be performed during regularly scheduled weekly downturns at the mill. This includes all excavation and installation of equipment in front of the mill. Machining work on the finishing stands themselves will be done during a 10-day outage in the fourth quarter. IPSCO
to Build Finishing Facilities at Blytheville “This
investment is part of IPSCO’s strategy to continue to build
a strong position in energy tubular product markets and to add value
through further processing of its steel products,” says Joe
Russo, senior vice president of the company. These
facilities will have the capability to upset, thread and couple
175,000 tons of OCTG products in the 1.9- to 4.5-inch diameter range
produced at Blytheville and will produce commercial product by the
end of this year. Products from Blytheville complement IPSCO’s production of energy and industrial tubular products from its Camanche, Iowa, and Canadian pipe mills. OSM
Acquires Camrose Pipe OSM
already held 60 percent of the partnership, and is now indirect
owner of 100 percent of Camrose Pipe. Camrose has two pipe manufacturing
mills that produce large-diameter products, with combined capacity
of about 320,000 tons per year. Jim
Declusin, OSM’s CEO, says Camrose is located in the heart of
the Canadian oil and natural gas reserves. The acquisition is part
of Oregon’s long-term strategy and commitment to the large-diameter
line pipe business. “Although the past two years have seen both low volume and pricing for large-diameter line pipe, we believe, based on conversations with our customers, that between the years 2006 and 2008 demand for large-diameter line pipe in North America could be as much as 2.5 million tons,” Declusin says. Executive
to Steel Caucus: Level the Playing Field For
specialty metals, Shilling said, this lack of a level playing field
could result in the outsourcing of innovation, with America losing
its leading-edge technology and production capacity moving offshore. Shilling
described challenges facing the specialty metals industry and its
importance to the national defense and industrial economy. From
meetings with senior government officials, he concluded there is
“an inadequate focus by the Department of Defense on the importance
of specialty metals to our national security. “Government
procurement policies should support the domestic industry, particularly
in the defense area,” Shilling stressed. “We are not proposing
that government procurement policies be used to prop up an uncompetitive
industry. What we are proposing is that procurement policies support
our domestic industry until a level playing field exists.” Shilling
reminded the caucus of upcoming reviews of existing antidumping
and countervailing duty orders on several stainless steel product
lines. “I cannot indicate strongly enough that we need these
orders to continue. The behavior of foreign producers in the marketplace
has been entirely clear. Many of them continue to be subsidized
by their governments, and most of them dump their products into
the U.S. marketplace,” he charged. Shilling is executive vice president, corporate development officer and chief technical officer of Allegheny Technologies Inc., Pittsburgh. Alcan
Sells Tubing Business “This
new entity will be a leader in the aluminum tubes business, with
focused management and resources for its market,” says Christel
Bories, president and CEO of Alcan Packaging. The
sale consists of three plants located in Saumur, France; Kolin,
Czech Republic; and Cividate al Piano, Italy. The tube company’s
780 employees will continue to work for the new owner, which expects
to realize annual sales of about $85 million. IPSCO
to Buy Back Shares As
of March 3, the company had more than 50.1 million common shares
outstanding. Any purchases under the bid will be made from March
16, 2005, to March 15, 2006, at the prevailing market price at the
time of purchase. Common shares purchased under this bid will be
cancelled. IPSCO
also notified holders of its 7.32% Series B Senior Notes due April
1, 2009, that the remaining $57 million outstanding principal amount
will be redeemed April 11, 2005. Proceeds for the share repurchase
and debt redemption will come from corporate funds. “This
strong market, combined with industry consolidation, positions IPSCO
to take advantage of the healthier market dynamics,” President
and CEO David Sutherland explains. “Demand and pricing in North
America for our products remain robust, and this should result in
continuing strong operating cash flow.” Given IPSCO’s current favorable financial position, he says, “we will prioritize cash utilization opportunities including capital investments, dividends, debt redemptions, share buybacks and acquisitions, for the purpose of optimizing sustainable shareholder value.” Galvanizing,
Annealing Guides Published The
map is organized by the type of plant—integrated, minimills
and outside processors. The
company has also published a market study of strip coil annealing
operations in North America, based on interviews with 106 plant
operators, and the outlook for upgrading, replacing or adding annealing
equipment. AIM
Market Research President Marc Liebman says this last study completes
a series of seven research projects focused on major steel and aluminum
process areas. Briefs North American Stainless cast its first heat of billets March 14 in Carrollton, Ky. With this start-up, NAS will now have a fully integrated manufacturing process for long products. The equipment, installed by Danieli, can produce square billets from 6.5 to 8.0 inches thick. This will allow NAS to increase the size of its wire rod coils up to 5,000 pounds, and produce bar up to 4 inches in diameter. Republic Engineered Products Inc., Fairlawn, Ohio, reported net income for 2004 of $29.3 million on sales of $1.19 billion and shipments of 1.8 million tons. This compares with a net loss of $162.5 million in 2003. Revenues increased 61.9 percent year over year and shipments grew 28 percent. The special-bar-quality producer distributed $11.7 million in profit-sharing payments to employees for 2004. AK Steel advised its flat-rolled carbon steel customers that a $230 per ton surcharge will be added to invoices for products shipped in April, an increase of $16 from March’s surcharge of $214 per ton. AK Steel also advised its electrical steel customers that a $295 per ton surcharge will be added to invoices for electrical steel products shipped in April, reduced $45 from the March surcharge of $340 per ton for those products. ThyssenKrupp Stahl A.G., Germany, has concluded the Carajas lump ore price negotiations for 2005 with Companhia Vale do Rio Doce, Rio de Janeiro, Brazil. As an outcome of these negotiations, the price increased by 79 percent vs. 2004. CVRD supplies ThyssenKrupp with about 14 million metric tons of iron ore products per year, including pellets, fines and lumps. Considering only lump ore, this volume totals about 2 million tons per year. Allegheny Ludlum announced a 5 percent increase in its prices for T309, T310 and T330 grades of cold-rolled stainless steel sheet, strip, plate, continuous mill plate and tubular-quality sheet and strip, effective March 28. All surcharges remain in effect. Universal Stainless & Alloy Products Inc. announced base price increases on all round, square, flat and hexagon bar products, as well as on all semi-finished ingot and billet products from its Bridgeville, Pa., and Dunkirk, N.Y., plants. The increases, effective April 18, are 4 percent on all air-melted products, 6 percent on stainless steel remelted grades, and 8 percent on high-strength low-alloy remelted grades. Timken Latrobe Steel increased prices 5 to 10 percent on all remelted aerospace alloys and air melt stainless steel grades March 15. Raw material surcharges remain in effect. “Increasing operational costs and other key factors have made this price increase necessary,” President Hans J. Sack says. Effective
with shipments March 21, Roanoke Electric Steel Corp. increased
its fuel surcharge from 8 to 12 percent. The company had not adjusted
its fuel surcharge since October, but with the continued escalation
in fuel cost, the adjustment was necessary to retain the carrier
base the company depends on, according to Donald R. Higgins, vice
president of sales. Mittal Steel Poland signed a letter of intent with SMS Demag, Germany, to build a new continuous caster at its Dabrowa Gornicza plant, a part of a significant capital expenditure plan under the terms of the privatization agreement for the former Polskie Huty Stali. The new caster will make higher quality slabs and increase the yield of steel produced. The company is also in talks to invest in a hot-rolling mill in Krakow. Southwire Co., Carrollton, Ga., has hired Morgan Construction Co. to supply a copper rod rolling mill system for Jiangxi Copper Co., Guixi City, Jiangxi Province, China. John T. Buell, manager of Southwire’s nonferrous sales, explains that the work is part of a contract for an SCR 4500 copper system being supplied to Jiangxi Copper by Southwire Co. Morgan will supply the mill with equipment needed to roll copper rod at 35 metric tons per hour. The mill is to be shipped by December. Over more than 30 years, Morgan has built more than 70 nonferrous mills for Southwire customers, in addition to completing 25 to 30 upgrades. In response to unprecedented demand for expanded metal products, Dramex Inc., Montreal, is adding a 200-ton fully automated expanded metal press to its Rexdale, Ontario, plant. The project will be completed over the next eight months for about $700,000. Indalex Aluminum Solutions, Belding, Mich., contracted Granco Clark to supply a handling system upgrade for its 1,650-ton press line at its plant in Pointe Claire, Quebec.
Obituaries Mr.
Davis “lived and loved Alcan his entire life,” says Travis
Engen, president and CEO. “His outstanding leadership and deep
commitment to values—values he expressed with poise and humility—have
forever embedded his humanity into Alcan.” In
1947, Mr. Davis, then 32, succeeded his father, Edward K. Davis,
as one of the youngest chief executives to run a company the size
of Alcan. He spearheaded the company’s international expansion,
and it was under his aegis that Alcan experienced its most rapid
period of growth. In
2002, Alcan created the Nathanael V. Davis Award, the highest corporate
recognition an employee can receive. People Steel Dynamics Inc.’s board has increased the authorized number of directors from 10 to 11. One director, James E. Kelley, 86, has resigned due to ill health, so the board has appointed two new directors to fill the vacancies. New directors are Dr. Frank D. Byrne and James C. Marcuccilli. U.S. Steel Corp. appointed Dennis G. Quirk to general manager of its Minnesota Ore Operations. Quirk succeeds James D. McConnell, who was named general manager-raw materials.
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