• Sunset Review Renews Hot-Roll Duties
• Mittal Asseses ISG Synergies,
  Selects Management Team
• Alcoa Helps Airbus A380 Take Flight
• Nucor Buys Marion Steel
• Outokumpu to Sell Fabricated Business
• Prices & Surcharges
• Stelco, Union Reach Pact on Restructuring
• Electralloy to Boost Melt Capacity
• Copper Mine Swaps Land with Government
• Standards Amended
  for Coke Oven Emissions
• Gerdau Ameristeel to Use
  Scrap Tires as Fuel
• ISG Restarts 110-Inch Plate Mill
  
• Briefs
• People

Sunset Review Renews Hot-Roll Duties
U.S. steel executives were as pleased as foreign mills and steel users were disappointed last month by the International Trade Commission sunset review ruling, which gives rise to continued duties on hot-roll steel imports.

The ITC determined in a 4-2 vote April 14 that revoking the existing countervailing duty and antidumping duty orders on certain hot-rolled carbon steel products from Brazil and Japan, or terminating the suspended antidumping investigation on certain hot-rolled carbon steel products from Russia, would likely lead to continuation or recurrence of material injury to the domestic industry. As a result of the commission’s determinations and the Department of Commerce’s recent affirmative findings, the existing orders on imports of these products will remain in place.

The U.S. was required to review the duties on flat-rolled carbon steel from Brazil, Japan and Russia, dating back to 1999, under the five-year sunset review process outlined in the Uruguay Round Agreements Act.

U.S. Steel President and CEO John Surma said the decision “correctly recognizes that there is no place in this market for unfairly traded imports—particularly as the [domestic] industry tries to solidify and build upon its recent progress.”

Domestic steel producers “deserve a fair chance to compete in their own market, which is what this case was all about,” he added.

“We are pleased that the ITC has recognized the importance of these measures,” said Nucor Corp. Vice Chairman, President and CEO Dan DiMicco. “This will not only be good for the domestic steel industry, but by strengthening the industry, will be positive for our customers as well.”

Importers and exporters were less than enthusiastic about the ITC’s decision, however.

“The Japanese steel industry is disappointed that the ITC has decided not to terminate the antidumping duty order on hot-rolled steel sheet,” said Hidenori Tazawa, chairman of the Japan Steel Information Center. “The facts in this case show that this decision was not justified. Japanese exports to the U.S. declined sharply after the preliminary determination in the original [1999] investigation and have continued to be negligible since then.

“The Japanese industry has focused on its home market and nearby markets in Asia, which are experiencing rapid growth,” Tazawa added. “That growth—and the regional focus—are expected to continue. Japanese producers are not seriously interested in re-entering the U.S. hot-rolled market.”

As a result of the continued duties, the Consuming Industries Trade Action Coalition’s Steel Task Force asserted that U.S. steel consumers will “continue to suffer from high prices, long lead times and quality problems,” spokesman Lewis Leibowitz said.
Steel consumers had argued before the ITC that the duties should be discontinued because the record profits of U.S. steel producers made it highly unlikely they would be harmed by removal of the duties.

“Circumstances have changed dramatically. Since the domestic industry cannot produce enough steel to meet U.S. demand, and the industry is profitable and competitive, why should U. S. policy impose a tax on imported steel that we need?” Leibowitz said.

The Precision Metalforming Association also expressed disappointment with the ITC vote, and warned of continuing damage to steel-consuming companies, such as metal formers and fabricators.

“With record-high steel prices and healthy profits for the steel industry
in 2004, there is no economic justification for the continuation of these duties,” PMA President William E. Gaskin said.

Separately, PMA has also called for an end to duties on stainless steel sheet and strip imports from France, Germany, Italy, Japan, Korea, Mexico, Taiwan and the United Kingdom, testifying April 16 that American manufacturers are suffering from stainless steel shortages.

Mittal Assesses ISG Synergies, Selects Management Team
As expected, in a vote April 12, the shareholders of Mittal Steel Co. N.V. and International Steel Group each approved the merger of the two companies, forming the world’s largest steel producer.

The steelmaker listed the savings it expects to achieve in the United States now that the merger has been completed.

• More than $200 million in annual purchasing and manufacturing;
  
• Purchasing synergies projected at $150 million a year due to changes in the mix of purchased goods, purchase-price reductions, and integrated purchasing processes;
  
• Manufacturing synergies of at least $60 million a year, based on mix and facility optimization plus sharing of best practices;
  
• Further operating synergies (such as reduced sales, general and administration expenses) projected at $20 million;
  
• One-time improvements (such as inventory reduction) estimated at $60 million;
  
• Plus additional opportunities in areas such as revenue enhancements, reduced capital expenditures and contract-related improvements in productivity.
  

Mittal Steel immediately made changes at its American operations. Rodney Mott, CEO of ISG, resigned, and Lou Schorsch, president and CEO of Ispat Inland, was named CEO of Mittal Steel USA.

Prior to joining Ispat Inland in October 2003, Schorsch held various senior management positions in the consulting and e-commerce sectors, primarily relating to the steel industry. From 1985-2000, he was a principal at McKinsey & Co., as co-leader of the firm’s metals practice.

“We are very impressed with the operational excellence at ISG. Its management team is to be complimented on the excellent job it has done, as well as on the strong relationship it has built with the unions,” says Lakshmi N. Mittal, chairman and CEO of Mittal Steel Co. NV. “I thank Rodney Mott for the excellent job he has done in leading ISG since its formation, and wish him every success in his future endeavors.”

Other key members of Mittal Steel USA include William Brake, executive vice president, Operations East; John Brett, controller; Carlos M. Hernandez, general counsel and secretary; Kenneth M. Jakubowicz, purchasing director; Greg Ludkovsky, vice president-technology; John Mang, executive vice president, Operations West; Michael Rippey, executive vice president, sales and marketing; and Tom Wood, vice president-labor relations. Brake, Hernandez, Mang and Wood all come from ISG, while Brett, Ludkovsky and Rippey all come from Ispat Inland.

Mittal Steel USA will be headquartered in or near Chicago. The eastern regional office will be in Richfield, Ohio, and the western regional office will be in Burns Harbor, Ind.

The Eastern Region includes ISG facilities in Cleveland and Warren, Ohio; Weirton, W.Va; Lackawanna, N.Y.; Coatesville and Conshocken, Pa; and Sparrows Point, Md.

The Western Region includes ISG plants at Burns Harbor and Indiana Harbor, Ind.; Riverdale and Hennepin, Ill.; Columbus Coatings, Columbus, Ohio; and the former Inland plant at Indiana Harbor, the I/N Tek and I/N Kote joint ventures with Nippon Steel Co. and Minorca Mine.

Across the Atlantic Ocean, Mittal Steel has merged its Central and Eastern European operations with its Western European operations to form one unified European business structure. The combined European business organization assumes responsibility for operations of all European business units.

Alcoa Helps Airbus A380 Take Flight
Alcoa Inc. claims a key role in the successful first flight of the new Airbus A380 jumbo airliner.

Alcoa provided such advanced metallic solutions as new alloys that add strength and durability to wings, fuselage and landing gear, and new multi-material lockbolts for the assembly of the plane’s center wing box.

Alcoa products touch the A380 in more than a million places and have set new standards in the performance of advanced aerospace aluminum, super alloys and fastening systems, says William F. Christopher, president of Alcoa’s Aerospace and Commercial Transportation Group.

Nucor Buys Marion Steel
Nucor Corp. has agreed to buy bar maker Marion Steel Co. for a cash price of about $113 million, subject to regulatory and board approval expected by mid-June.

The Marion, Ohio, bar products mill has an annual capacity of about 400,000 tons. Its principal products are angles, flats, rebar, rounds and signposts.

“Marion represents an excellent addition and complement to Nucor’s bar products group. We are looking forward to the addition of the Marion operations and team to our Nucor family,” says Dan DiMicco, Nucor vice chairman, president and CEO.

“We believe the combination of Marion into the Nucor bar mill group will enhance the level, reliability and quality of service to our combined customers,” says Mike Parrish, executive vice president of Nucor.

Outokumpu to Sell Fabricated Business
Outokumpu and Nordic Capital signed a sales and purchase agreement under which Outokumpu will sell its fabricated copper products business—Outokumpu Copper Products Oy—excluding the Tube and Brass division, to the private equity firm Nordic Capital for 599 million euros (roughly $772 million). The deal is expected to close by June.

Outokumpu CEO Juha Rantanen says the sale of the fabricated copper products business “is a strategic move on our way to a focused stainless steel and technology company. Our vision is to be the undisputed No. 1 in stainless and, with the divestment, we will make a significant step towards reaching our desired business structure.

“At the same time,” he says, “the divested business will have a far better growth potential with its new owner.”

The sell-off will enable Outokumpu to place all its managerial and financial resources into the development of the stainless steel business.

The scope of the transaction comprises the following divisions and businesses of Outokumpu Copper: Americas, Europe, Asia, automotive heat exchangers, appliance heat exchangers and the forming equipment businesses. The divested company will continue to use the name Outokumpu Copper Products Oy up to 12 months after closing.

Bo Söderberg, partner at Nordic Capital, says he sees “good prospects for Outokumpu Copper Products. It has good, long-term customer relationships and great opportunities for growth, not least in the Asian markets and through new solutions of copper for future applications, including new markets created by stricter environmental standards.”

The company is recognized for high quality and application engineering expertise, he adds. Nordic expects to work closely with senior managers to further develop and expand the business globally.

The Tube and Brass division of Outokumpu Copper is not part of the sale. Some of its units were acquired by Boliden in 2003, and the integration and restructuring process is ongoing. To bring the Tube and Brass division back to profitability will take some time, and Outokumpu intends to divest these businesses at a later date.

Prices & Surcharges

• AK Steel has added a titanium component to its stainless steel raw material surcharge due to a nearly five-fold rise in the cost of the steelmaking alloy since the beginning of 2004. The surcharge, effective with shipments on and after May 1, will be applied to all grades of stainless steel sheet, strip and plate products that contain a titanium addition.
  
• The Specialty Alloys Operations unit of Carpenter Technology Corp. on May 1 began to include titanium in its raw material surcharge formula for titanium-bearing grades of specialty alloys. The surcharge will be based upon the monthly price of MW U.S. The surcharge is needed to offset a large increase in the cost of titanium. Carpenter’s Specialty Alloys unit also raised base prices 4 to 7 percent on all stainless alloys and 6 to 10 percent on all premium-melted alloys in all product forms, effective on all new orders April 15. Raw material surcharges remain in effect. Carpenter says demand continues to be very strong for its premium melted and stainless alloy products. The price increases reflect the stronger demand and higher operational costs associated with energy, freight, manufacturing supplies and health care.
  
• Allegheny Technologies Inc.’s Allvac division raised prices on all nickel- and cobalt-based superalloys, vacuum-melted specialty steels and titanium alloy products by 5 to 9 percent April 15. Allvac’s existing raw materials index and surcharge policies remain in effect.
  
• The Timken Co. raised prices on seamless tubular steel products effective with shipments beginning July 1. Raw material surcharges will remain in effect. All carbon tubing with walls less than 1.75-inch-thick will rise 20 percent, while carbon tubing with walls equal to or greater than 1.75-inch-thick will rise 25 percent. All alloy tubing with walls less than 1.75-inch-thick will rise 8 percent, while alloy tubing with walls equal to or greater than 1.75-inch thick will rise 12 percent.
  
• Universal Stainless & Alloy Products Inc. will begin to include titanium in its raw material surcharge formula for titanium-bearing grades of stainless steel and nickel alloys, effective with shipments May 16. The affected grades are Types 321, 17-7, A286, 600, 330 and 330 CB. The surcharge will be based on Ryan’s Notes to establish the monthly average for ferrotitanium (FeTi). The surcharge calculation will have a trigger level of $3.50 per pound titanium. Dudley J. Merchant, vice president of sales and marketing, says titanium costs have increased substantially. The surcharge mechanism is designed to protect customers and the company and makes Universal’s pricing policies transparent.

Stelco, Union Reach Pact on Restructuring
Stelco Inc., Hamilton, Ontario, reached an agreement with the United Steelworkers of America on the next steps in its capital raising process and restructuring. The agreement was approved by the Ontario Superior Court of Justice on April 21.

Under the terms of the pact, the company and union agreed that Tricap Management Ltd., Toronto, will be treated as a financial advisor to the union.

Stelco President and CEO Courtney Pratt says the deal with the Steelworkers “provides a clear framework within which we can work together and with other stakeholders. This will enable us all to focus on achieving our shared goal: the successful outcome of our restructuring process.”

Stelco’s agreement with the union likely stemmed from the union’s April 13 announcement that it had signed a letter of intent with Tricap Management to work together on a Cdn $1.35 billion plan to recapitalize Stelco Inc., and remove the steelmaker from protection under Canada’s Companies’ Creditors Arrangement Act.

Electralloy to Boost Melt Capacity
Anticipating a sustained market recovery, Electralloy, a custom melt producer of high-quality alloys for aerospace, power generation, nuclear, forging, military and other demanding applications, has launched capital projects for the consumable electrode remelt facility and AOD (Argon-oxygen decarburization) refining vessels.

Recovering market demand for high-technology stainless, duplex stainless, nickel alloys and Electralloy’s own commitment to improve customer service drive these projects.

Electralloy will add a 125,000-square-foot building addition that will include a 40-inch Consarc VAR furnace, complemented by a 50-ton crane. The additional VAR melt capacity will enable the company to provide its customers with shorter lead times in a tight supply market and supply additional grades that previously were unavailable due to capacity constraints.

The original facility houses two vacuum arc remelt furnaces and one electroslag remelt furnace. With the new building addition, Electralloy will still be able to add remelt and heat-treat furnaces in the future.

Anticipated commissioning date for new VAR melt furnace is October. The upgrade, scheduled for plant shutdown in July, will allow additional tonnage to be produced while retaining the flexibility to produce smaller custom refined heats.

Copper Mine Swaps Land with Government
Phelps Dodge Corp. reports that the U.S. Department of the Interior affirmed a Bureau of Land Management decision supporting a land exchange with the company. The action allows the development of a proposed copper mining operation near Safford, Ariz., to continue to move forward.

The exchange will transfer to the public valuable, environmentally sensitive land owned by Phelps Dodge in exchange for land of equal value located next to the company’s property near Safford. The land Phelps Dodge will receive will be used primarily for support facilities and as a buffer to the proposed mining operations.

“This is one more milestone on the way to bringing this significant project into operation,” says Timothy R. Snider, president and chief operating officer of Phelps Dodge. “There is still much work to be done before mining can begin.”

The proposed project includes development of the Dos Pobres and San Juan copper ore bodies, about eight miles north of Safford in southeastern Arizona. The company is continuing efforts to secure all necessary permits. The project could be in operation in late 2007 or early 2008. Once it opens, it will be the first new U.S. copper mine in more than 30 years.

Standards Amended for Coke Oven Emissions
The U.S. Environmental Protection Agency has issued the first in a series of emissions reduction requirements known as residual risk standards, requiring further reductions in emissions of toxic air pollutants from coke ovens.

EPA amended maximum achievable control technology (MACT) standards for coke ovens to include more stringent requirements to address health risks remaining after implementing its October 1993 air toxics emission standards.

These amendments include requirements for new or reconstructed coke oven batteries that reflect improvements in emission control practices that have occurred in the years since the 1993 standard.

These standards apply to coke oven emissions from nine batteries of coke ovens at five coke plants throughout the country. Most existing facilities have been reducing emissions beyond the limits required by the 1993 regulation. The final amendments will further reduce risks to public health by requiring the current level of emissions control to be maintained.

Gerdau Ameristeel to Use Scrap Tires as Fuel
Gerdau Ameristeel Corp. has acquired a license to use the patented Stebbing Engineering Scrap Tire Process in its minimills.

he process uses scrap tires to partially replace the coal or coke used in electric arc furnace steel production. The carbon and hydrogen in the tires also serve as a source of energy, and the tires’ steel belts are added to the scrap-steel mix.

According to the company, tires burn much cleaner and hotter than coal and reduce the electricity required to melt the steel. The Stebbing process will save money spent on purchasing charge carbon and transporting it. When compared to using coal, the process reduces emissions by more than 19 percent.

Gerdau Ameristeel already conducted numerous tests at its Jackson, Tenn., mill to ensure that steel product quality was maintained, and that the process delivers on the promised cost savings.

ISG Restarts 110-Inch Plate Mill
International Steel Group Inc. successfully restarted its 110-inch plate mill April 6 at the Burns Harbor, Ind., facility. ISG announced plans to restart the operation in December and has since hired and trained 65 new employees to operate the mill.

Thomas J. Cera, vice president-ISG Plate Operations, says, “Our decision to return this mill to operation was driven by increasing demand from our existing customers and our desire to quickly respond to their needs.”

The mill makes steel plate for a wide range of industries, including rail, construction, shipbuilding, oil and gas exploration and production, and machinery. The ISG Plate Division also is a major supplier of armored plate products that are used to protect the U.S. Armed Forces.

Briefs
National Bronze & Metals Ohio Inc. has broken ground for a 24,500-square-foot warehouse in Lorain, expanding its existing 35,000-square-foot production and warehouse facility. The new warehouse, to be completed by October, will contain NBMO-produced inventory as well as that of other copper-based alloy producers. This expansion follows that of the company’s corporate headquarters in Houston, which was completed late last year.

Hourly employees of Koppel Steel’s seamless tubular operation voted to extend their 57-month labor agreement that was scheduled to expire in 2007. Approximately 500 hourly employees represented by the United Steelworkers of America Local 9305 are covered by the new contract that will now expire in May 2010. “The extension of the contract is positive for all involved,” says Rene J. Robichaud, president and CEO of parent NS Group Inc. The new pact “enables the company to continue to improve its competitive position while providing fair enhancements in wages and benefits for our employees.”

Olin Corp., East Alton, Ill., was recently awarded a modification (valued at more than $7.46 million) to a firm-fixed-price contract for 169,000 Caliber 0.50 mm Sabot Light Armor Penetrator and Sabot Light Armor Penetrator Tracer Cartridges. Work will be performed in East Alton, Ill.; Jonesborough, Tenn.; Towanda, Pa.; Hopkins, Minn.; Wood Dale, Ill.; Jamestown, N.Y.; Independence, Mo.; and St. Marks, Fla.; and is expected to be completed by April 30, 2007. The U.S. Army Tank-Automotive and Armaments Command, Picatinny, N.J., is the primary contractor.

Alcan Inc., Montreal, has opened an automotive bumper fabricating plant in Saguenay, Quebec. The plant will eventually be able to produce 1 million bumper beams. Jean-Noel Dargnies, president of Alcan Automotive Structures, says the new operation represents an opportunity to demonstrate the company’s competitiveness in the demanding environment of the automotive market. The plant is the second step in building a new market for aluminum structural assemblies in North America. The company opened a similar plant last year in Novi, Mich. The two facilities will work as an integrated operation.

Alcoa Inc.’s Subassembly and Logistics business will open a new manufacturing plant in Salisbury, N.C.. Alcoa Subassembly and Logistics, a part of Alcoa Wheel and Forged Products, provides wheel and tire assemblies to the Freightliner Group, a heavy-duty truck manufacturer that makes medium-duty and specialized commercial vehicles. The new North Carolina facility, a $6 million investment, will support Freightliner locations in North and South Carolina. Production was scheduled to begin in mid-April.

Alcan Inc. has completed the sale of Almet France to U.S.-based Amari Metal France Ltd., which specializes in distributing aluminum, stainless steel and red metal products. Terms of the transaction were not disclosed. “The acquisition by a major international multi-metal distributor is a good opportunity to ensure a bright future for Almet France, with an approach and resources adapted to its market,” says Michel Jacques, president and CEO, Alcan Engineered Products. “Alcan’s strategy involves channeling its investments toward more specialized activities, which means withdrawing from non-specialized distribution,” he adds.

RUSAL, the Moscow-based aluminum producer, has secured a 46.6 million euro (about $60 million) export loan to fund a large-scale program to upgrade its Armenal foil mill in Armenia. The loan—from Bayerische Landesbank in Germany with guarantees from the German export loan agency Euler Hermes—is the first such loan granted by a foreign bank to a private company in Armenia to undertake a technical modernization program. The project will create a full cycle production system and extend the plant’s product assortment. The first stage of the project should be completed this fall. The updated plant’s rated production capacity will reach 25,000 tons of foil a year, 18,000 tons of that being thin foil. Armenal will focus on making thin foil (6-7 micron thick).

Mittal Steel’s Newcastle Works in South Africa has contracted Morgan Construction Co. to upgrade its two-strand Morgan wire mill. Jens Nylander, sales manager-material handling, says that with the new equipment, coils that were previously strapped manually will now be automatically bound with wire ties. This will reduce the number of operators, which will improve operating costs and also offer greater consistency. The turnkey installation is expected to completed by the end of the year.

Siemens Industrial Solutions and Services Group will equip hot-strip mill No. 2 with new automation equipment at Corus Strip Products, Ijmuiden, the Netherlands. The modernization should be completed by 2007. Siemens will also equip two hot-dip galvanizing lines in China, for Anshan New Steel Co. The Anshan galvanizing lines should start up at the beginning of 2006.

Timken Latrobe Steel has completed the upgrade of its continuous rolling mill in Latrobe, Pa., which makes steel bar and wire for specialty applications. “This modernization project allows us to manufacture product to closer tolerances and improve already high quality levels,” President Hans J. Sack says. The mill is equipped with electric induction and resistance heating, making it possible to roll small-size product with a high-degree of flexibility and minimal decarburization. The mill uses a three-roll configuration throughout its finishing train. This is ideal for Latrobe’s product program of hard-to-roll materials such as high-speed and tool steels. The configuration also allows the company to address markets in specialty metals and stainless products.

Corus Packaging Plus has ordered an automated inspection system for its tinplate plant in the Netherlands. Parsytec will supply seven surface inspection systems and associated licenses to the Trostre and IJmuiden works, to be installed at six tinning lines and one five-stand rolling mill. Corus Packaging already uses Parsytec’s surface inspection solution at the tinning line EV14 in IJmuiden and ETL5 in Trostre. The completed system means the company can establish improved coil releasing at all of its tinning lines, analyze and eliminate defect causes across all lines and establish a way to fully harmonize customer protection based on surface data. Corus is the largest tinplate producer in the world, with more than 1 million tons of annual capacity.

People
John H. Goodish was elected executive vice president and chief operating officer of U.S. Steel Corp., overseeing day-to-day operations of the company’s domestic and Central European facilities. Christopher J. Navetta has been appointed senior vice president-procurement, logistics and diversified businesses, a new position at headquarters in Pittsburgh. David H. Lohr has been named senior vice president-European operations and president-U.S. Steel Kosice, where he will also oversee U.S. Steel Serbia. George F. Babcoke has been named vice president-plant operations. Anthony R. Bridge has been appointed vice president-engineering and technology, a new position.

Linda D’Angelo was appointed director of business development for IPSCO Inc.’s Canadian Tubular Products group. She has 18 years of experience as a sales and marketing executive. She belongs to the board of the Canadian Heavy Oil Association and the Canadian Society for Unconventional Gas.

The board of The Timken Co. elected Ward J. “Tim” Timken Jr. to vice chairman. He is already executive vice president of Timken and president of the Steel Group. He represents the fifth generation of Timken family members that have played active roles in management since the company was founded in 1899.
Richard Wechsler has joined Nucor Corp. as general manager of international business development. Wechsler was president of Castrip LLC, and is assisting with the transition of Castrip to new leadership. Wechsler was named president of Castrip LLC at its formation in March 2000.

Jim Tennant was named president of Ohio Coatings Co. He joined OCC in June 1998 as chief financial officer. He will retain his duties as CFO, vice president of administration and treasurer. OCC is a joint venture of Wheeling-Pittsburgh Steel and Dong Yang Tinplate of South Korea. Before joining OCC, Tennant spent nearly 20 years with Wheeling-Pittsburgh Steel, lastly as general manager of manufacturing accounting.

Michael Hanley, executive vice president of Alcan Inc. and president and chief executive officer of the company’s bauxite and alumina business group, has also assumed interim responsibilities as Alcan’s chief financial officer. He succeeds Geoffery E. Merszei, who returned to Dow Chemical Co. Beginning in mid-May, Alcan will review candidates for a permanent appointment. Hanley has been with Alcan since 1998.

Alcoa Inc. has appointed three executives to new positions. William J. O’Rourke is president, Alcoa Russia, Richard L. Siewert Jr., is vice president, Environment, Health & Safety and Public Strategy, and Julie Caponi is vice president, Internal Audit. O’Rourke has been an Alcoa vice president since 1997. Siewert joined Alcoa in October 2001 as a vice president, before which he was the White House press secretary from 2000-2001. Caponi joined Alcoa in 2000 and shortly became assistant controller. In 2004, she was promoted to director, Financial Planning & Analysis.