July 2005
Metal Industry News

IMSA Acero Aims to be Prepaint Leader in U.S.
Grupo IMSA, Monterrey, Mexico, through IMSA Acero’s U.S. subsidiary Steelscape, plans projects to strengthen its position in the U.S. market. In Phase 1, to begin in the second quarter of 2006, the company will relocate its Richmond, Calif., painting and metal coating lines to Shreveport, La.

The Richmond plant includes a 255,000 metric-tons-per-year metal coating line and a 155,000 metric-tons-per-year painting line. Each line will be upgraded after being relocated to expand the product line and improve operating efficiencies.

The second phase, yet to be scheduled, will involve the installation of a cold-rolling steel mill, a pickling line and a second metal coating line.

In conjunction with these initiatives, Steelscape will upgrade its West Coast facilities, expanding production capacity in order to support growth in that region. The company expects to invest about $200 million on these projects.

The Steelscape relocation project reflects its efforts to serve the entire U.S. market more effectively. After analyzing U.S. pre-painting capacity, the company decided to relocate existing lines rather than build greenfield plants in order to improve the alignment between supply and demand. Shreveport was chosen because of its strategic location near three rail services, which includes access from Monterrey; highways in each direction; as well as water access from the Gulf of Mexico and Mississippi River.

In conjunction with Steelscape’s recent acquisition of an industrial steel painting plant in Fairfield, Ala., “this project is in line with our strategies to operate with a total presence in the U.S. market and to become the North American construction industry’s largest prepainted steel supplier,” says IMSA Acero’s CEO, Santiago Clariond.

Mittal Cuts Output to Match Demand;
Lays off 700 Workers at Weirton
Mittal Steel Co. N.V., Rotterdam, plans to reduce its global production by 1 million tons in the third quarter. This follows similar reductions in the second quarter. The production cutbacks will be equally split between the company’s North American operations and those in Europe and the rest of the world.

Mittal Steel Chairman and CEO Lakshmi Mittal says it is “essential that we act in a responsible and mature manner, and respond accordingly to current market dynamics. The production cutbacks will help to reduce the inventory build-up that we have and help restore equilibrium to the global supply and demand equation.”

Earlier, Mittal decided that a lengthier outage, with accompanying layoffs, would be needed at its plant in Weirton, W.Va. The Weirton blast furnace was idling since the end of May, but market conditions failed to improve in the interim, says Bill Brake, executive vice president, Operations East. “We’ll bring it back up when the market tells us that the time is right.”

Brake forecasts an eight- to 10-week outage, which began June 9. The Weirton plant had already scheduled a plant-wide vacation for the last week of July. While a small crew remains to keep the ironmaking and steelmaking equipment ready for a quick return, about 700 employees were laid off.

Alcoa Inks $2 Billion Airbus Deal
Alcoa Inc., Pittsburgh, recently signed a new definitive long-term agreement to supply Airbus with high-performance sheet and plate products. The agreement covers Airbus products including the aircraft maker’s new A380F cargo and A350 wide-body passenger planes. The aluminum mill also signed an agreement to supply additional extrusion products to Airbus.

Terms were not disclosed, but these agreements reportedly are worth nearly $2 billion in revenues through December 2011.

“This extension to the partnership between Airbus and Alcoa utilizes elements of our 20-20 initiative to reduce the weight and cost of advanced aerospace metallics,” says William Christopher, Alcoa executive vice president and group president of Alcoa Aerospace, Automotive and Commercial Transportation.

Alcoa also plans to boost its global aerospace heat-treated sheet and plate production by approximately 50 percent over the next 18 months to respond to orders from aerospace customers. Build rates for aircraft are expected to grow strongly over the next several years.

Alcoa will achieve this additional capacity through productivity improvement and capital investment of about $60 million across rolling mills in four countries. Alco will expand heat-treat operations at mills in Davenport, Iowa; Kitts Green, U.K.; Fusina, Italy; and Belaya Kalitva, Russia.

Kaiser Signs Supply Pact
with Airbus, Too
Kaiser Aluminum, Foothill Ranch, Calif., recently signed a new agreement to supply Airbus with heat treat aluminum sheet and plate through 2011.

Although Kaiser has supplied lightweight sheet to Airbus for many years, the new agreement “represents an important piece of committed business for Kaiser and is an outgrowth of the Airbus qualification of additional Kaiser sheet and plate products in 2004,” says Jack A. Hockema, Kaiser’s president and CEO. “Airbus has clearly demonstrated an increased demand for aluminum sheet and plate, as evidenced in part by the development of the new A380.”

Kaiser produces aluminum sheet and plate for aerospace applications at its Trentwood, Wash., mill.

Oregon Steel Beset by Rail,
Weather Woes
Oregon Steel Mills Inc. downgraded its second-quarter earnings expectations to reflect its inability to deliver about 30,000 tons of welded pipe products representing $34 million in revenue.

The deliveries were affected by shortages of railroad cars and adverse weather conditions at the product destination points. The shipments are expected to be delivered, and the associated revenue recorded, during the third quarter.

Jim Declusin, president and CEO, says sales volume for Oregon’s plate and rod products has declined in recent months due to customer inventory balances, yet operating margin per ton for these products continues to compare favorably to those realized in the first quarter. He expects demand for these products to pick up in the third quarter as customers reduce inventories.

Welded pipe and rail products continue to meet Oregon’s volume and operating margin expectations. While total 2005 shipments are expected to decline 5 percent from 2004, mill executives believe income from continuing operations will be similar to 2004.

Nucor Closes Marion Deal
Nucor Steel Marion Inc. has completed the purchase of Marion Steel Co.’s assets for approximately $110 million. In Marion, Ohio, the bar products mill has an annual capacity of 400,000 tons and is located close to 60 percent of the steel consumption in the United States.

The company’s principal products are angles, flats, rebar, rounds and signposts.
“Marion is an excellent addition and complement to our existing bar products group,” says Dan DiMicco, Nucor’s vice chairman, president and CEO. “The combination of Marion into the Nucor bar mill group will enhance the level, reliability and quality of service to our combined customers.”

Phelps Dodge to Build
New Commercial EW Facility
Phelps Dodge Mining Co. will build the first-ever commercial-scale copper concentrate leaching and direct electrowinning facility at its copper mine in Morenci, Ariz.
The facility will employ proprietary technology developed by Phelps Dodge and under demonstration at its copper mine in Bagdad, Ariz., to process mixed primary and secondary copper ores. It is being built in conjunction with the restart of an idled concentrator at Morenci.

The company’s board approved expenditures of $210 million for these projects, which are expected to start up in 2007.

Concentrate leaching technology, in conjunction with a conventional milling and flotation concentrator, allows copper sulfide ores to be transformed to copper metal through the efficient-pressure leaching and electrowinning process instead of smelting and refining. The new concentrate leaching facilities will be incorporated into the existing leaching and electrowinning complex at Morenci.

Alcan Realigns European Facilities
Alcan Inc., Montreal, is restructuring its Engineered Products facilities in Singen, Germany, and Sierre, Switzerland, in order to improve efficiency and ensure their long-term viability. Alcan will integrate its extrusion activities at the Singen and Sierre plants, and restructure the automotive structures and composite into its operations at Singen.
“Alcan, like all manufacturers in Europe, faces increasing international competition and challenging market conditions,” says Michel Jacques, president and CEO of Alcan Engineered Products.

The extruded product facilities in Singen and Sierre will be managed as a single operating unit within the Extruded Products business unit. The integration of the activities and the combination of support functions will optimize the operational efficiency of the two facilities. This will affect about 120 employees in Singen and 110 in Sierre.
The automotive structures operation in Singen will focus its design and technology capabilities on crash management systems and similar applications. Up to 70 employees may be affected.

The Composites operations in Singen will be realigned to optimize the capacity utilization and improve competitiveness Up to 90 employees will be affected, in addition to 20 more people at Singen’s Shared Service center.

Mittal Steel Exits Iron Ore Shipping
Mittal Steel has disposed of its bareboat charter interests in two lake vessels that provide raw materials to its steelworks in Burns Harbor, Ind. The vessels were chartered by International Steel Group, now part of Mittal Steel USA.

Ownership of M/V Burns Harbor was transferred to American Steamship Co. from a vessel trust. The 1,000-foot-long ship can hold over 72,000 tons of bulk cargo. The steelmaker’s interest in the M/V Stewart J. Cort was sold to a subsidiary of The Interlake Steamship Co. The 1,000-foot-long Cort has capacity for more than 58,000 tons of bulk cargo.

Mittal signed long-term agreements with American Steamship Co. and a subsidiary of Interlake Steamship Co. to time-charter the two ships to transport iron ore on the Great Lakes.

Briefs
AK Steel Inc., Middletown, Ohio, advised its flat-rolled carbon steel customers that a $208 per ton surcharge is being added to invoices for products shipped during July. The company also advised its electrical steel customers that a $200 per ton surcharge is being added to invoices for electrical steel products shipped in July. Surcharges are based on reported prices for raw materials and energy used to manufacture the products.

The Specialty Alloys Operations unit of Carpenter Technology Corp. raised prices 5 to 10 percent in June on all premium melted alloys. Additionally, due to an unprecedented rise in nickel premiums, it changed its surcharge mechanism to increase the nickel premium component from 23 cents to 30 cents per pound.

Universal Stainless & Alloy Products Inc., Bridgeville, Pa., raised base prices on all premium melted steels consisting of vacuum arc remelted and electro slag remelted steels. The increases are 6 percent on all stainless steel remelted grades and 8 percent on all high-strength low-alloy remelted grades. Universal also raised its surcharge premium for nickel to 30 cents a pound.

Timken Latrobe Steel raised prices by 5 to 10 percent June 1 on all remelted aerospace alloys, air melt stainless steel and tool steel grades. Raw material surcharges remained in effect.

Gerdau Ameristeel completed construction of a new $8.2 million, 68,000-square-foot warehouse at its Knoxville steel mill. The warehouse replaced an existing structure and can house up to 35,000 tons of finished steel. It features a drive-through loading bay and two new rail spurs.

Commercial Metals Co., Irving, Texas, reported net earnings of $71.7 million on net sales of $1.7 billion for the quarter ended May 31, which compares with earnings of $50.9 million on revenues of $1.4 billion for the same quarter of 2004. The results reflected a seasonal pickup in construction, offset to some extent by global softening in other markets. “Our outlook for the fourth quarter remains very positive. We believe end-use demand should remain solid while prices stabilize,” says CMC President and CEO Stanley A. Rabin.

Sharon Tube, a maker of welded and seamless pipe and mechanical tubing, selected AXIS Computer Systems Inc.’s AXIOM Enterprise Resource Management System as its new business and manufacturing management system. Sharon Tube is implementing AXIOM at its headquarters and throughout its plants in Sharon and Wheatland, Pa., and Niles and Brookfield, Ohio.

Advanced Gauging Technologies L.L.C. has upgraded two obsolete thickness gauges on a galvanizing line at California Steel Industries Inc., Fontana, Calif. The company also replaced an obsolete gauge on a 72-inch-wide slitter with an AGT400 thickness gauge and SPC reporting system at Mi-Tech Steel Inc., Murfreesboro, Tenn.
Correction

Information on Aluminiumwerk Unna-USA Inc., Aurora, Colo., was listed incorrectly in the recently published spring Metal Center News Metal Distribution directory. Aluminiumwerk produces and sells aluminum tubing and pipe, both seamless extruded and drawn. The company does not produce welded tubing or bar, as indicated in the chart on page 34.

BestTransport Inc., which provides on-demand Transportation Management Systems, has helped Alcoa Home Exteriors to improve existing carrier relationships and operations, boost on-time deliveries and optimize shipment capacities. “We had strong relationships with freight carriers, but there was still room to improve our response to some service issues and establish new transportation processes,” a company logistics spokeswoman says. Through BestTransport, Alcoa has identified carriers that meet on-time, damage-free delivery standards, made service improvements and reduced costs.

TPCO Yuantong Stainless Steel Ware Corp., Ltd. will install a grinding and polishing line from SMS Demag Ltd., Canada, at its plant in Tianjin, China. The line is capable of repair grinding and finish grinding hot-rolled and cold-rolled stainless steels. Consortium partners for the project include ACME Mfg. Co. for the grinding section and Siemens Canada Ltd. for the electrics. Commissioning will take place late this year.

Aluminum and zinc-plated metals producers across the globe now have access to a new process involving trivalent chromium pre- and post-treatments, licensed by SurTec International, Zwingenberg, Germany, from the U.S. Navy. This process is being marketed by SurTec under the trade name SurTec 650-ChromitAL TCP. The use of trivalent chromium pre- and post-treatments could aid several industries that have relied heavily on hexavalent chromium to prevent corrosion and help paint stick to non-adherent metal surfaces. These include aerospace, automobile, hardware, electrical, telecommunication and construction. Trivalent chromium is environmentally benign and serves as an effective, high-performance corrosion-resistant coating. It was created and patented after years of research and development at the Naval Air Warfare Center Aircraft Division, Patuxent River, Md.

People
The board of Gerdau Ameristeel elected Phillip Casey as chairman in addition to his continuing duties as chief executive officer. Former chairman Jorge Johannpeter remains as a director. The board also appointed Mario Longhi as president, and expects to appoint him as successor CEO as soon as January 2006. Longhi has spent 23 years on the executive team of Alcoa Inc., most recently as vice president, and group president, global extrusions and end products.

Ricardo Belda succeeds Mario Longhi as group president of the global extruded and end products business of Alcoa Inc. Belda continues to serve as Alcoa’s president for the European Region, and is integrating recently acquired fabricating facilities in Russia into the European group.

Russell W. Maier, president and CEO of Michigan Seamless Tube was named Turnaround Entrepreneur of the Year by Ernst & Young LLP. Maier and his wife Kathleen, vice president of sales and marketing, led the purchase of Michigan Specialty Tube, a division of Vision Metals Inc., out of bankruptcy. Together with other executives, they reorganized the company and restarted the South Lyon, Mich., mill with a new labor pact, no liabilities and no debt. Within a year, the company was profitable. David Gast has been promoted to vice president of sourcing and trading for Hydro Aluminum’s Metal Products unit in North America. Gast will oversee all scrap sourcing and energy procurement for the unit’s six remelters. He will also work closely with the Sourcing and Trading group of Hydro Aluminium in Oslo, Norway. Gast has been with the company for 13 years, primarily in sourcing and procurement and was most recently director of sourcing.

Wise Metals Group has promoted three longtime employees and appointed an aluminum industry veteran to a key post. Dick Weaver, with the company 23 years-most recently as vice president of metal controls-was named executive vice president of development and risk management. Gary Curtis, with the company for 11 years-most recently as vice president of operations for Wise Recycling-is now president of Wise Recycling. Harry Sneigle joined Wise Alloys as national sales manager, focused on expanding into common alloy coil products. He was national sales manager at Ormet, and previously worked at Metal Exchange Corp., Ravenswood Aluminum and Kaiser Aluminum. Lastly, Wise Alloys promoted Pam Hannon to regional sales manager, overseeing common alloy coil products in the Southeast. She has spent 20 years in the industry, both at Wise Alloys and at Reynolds Metals Co.

Aluminium producer RUSAL appointed Australia Managing Director Duncan Hedditch to a newly created post as Deputy General Director for Sustainability. Hedditch now leads the company’s efforts in labor safety, production efficiency and environmental sustainability. He joined RUSAL in May 2002 as executive director and then managing director at Krasnoyarsk, where he introduced new management methods that enhanced industrial safety, environmental performance and productivity.

Carpenter Technology Corp. named Jeffrey Kleinschmidt general manager of Grupo Carpenter, the holding company for Carpenter Servicios S.A. de C.V., with operating responsibility for Aceros Fortuna, which provides distribution services for Carpenter’s Specialty Alloys Operations in Mexico.

 
 

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