| September 2005 |  |
| Metal Industry News | |
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Steel
Industry Deals with Disaster Aluminum
& Stainless Inc. closed its downtown New Orleans facility, said
President Joe Wolf, speaking from the company’s Lafayette,
La., headquarters. He had heard from more than half of the warehouse’s
25 employees, who evacuated, but not all of them. “Cell phone
service is spotty at best. We can’t call them,” he said,
adding “we are going to take care of them financially.” One
Aluminum & Stainless employee reported that the warehouse was
flooded and that a door was open. “Between water and vandalism,
we have a serious cleanup ahead of us,” Wolf said. Namasco
Corp., which has a New Orleans warehouse, established a hotline
for employees affected by Katrina. Though the facility is closed,
all employees have been accounted for, said Marty Flanagan, vice
president of marketing. Most evacuated workers are staying with
relatives, some as far as Texas and Tennessee. Many are being assigned
to other facilities in the South and Southeast. “We
have not been able to access our facility to assess potential damage,
in order to begin repair or even to project what that effort will
take,” Flanagan says. The company will send an assessment team
in as soon as it’s feasible. Namasco
has contingency plans to supply customers in Louisiana, Mississippi
and Alabama from branches in Birmingham and Houston. The metal center
will post updates on its Web site for employees, customers and vendors,
“to keep them apprised of our response to the difficulties
there in the Gulf,” he says. O’Neal
Steel saw storm impacts in Mobile, Ala., Lafayette, La., Chattanooga,
Tenn., and Jackson, Miss. The last three faced power and cell phone
outages, but have returned to service. In Mobile, the storm pulled
off a large section of the facility’s roof. “One entire
bay is pretty much gone. It’s a blessing that there wasn’t
major flooding, though rain has come in,” said spokeswoman
Shirley Fagan. In
advance of Katrina, O’Neal loaded up all its Mobile-based trucks
with steel and moved them north, she noted. “Our big dilemma
is that we have so many customers in the area who are going to need
us. But there is no Interstate 10, which runs from Mobile to our
customers in Biloxi, Pascagoula and to New Orleans, and we can’t
get there right now.” IPSCO
Inc.’s steelworks in Mobile, Ala., remains in operation. John
Comrie, director of trade policy and communications, says the plant
kept the reheat furnace warm during the hurricane and was able to
restart the plant quickly with a small number of employees. Most
IPSCO employees returned to work, but near Mobile “the devastation
is quite severe. We have a few employees who are having quite a
lot of difficulty. We have not been able to determine the extent
of their problems and how the company will be able to help them.”
IPSCO had already aided the city of Mobile by supplying and delivering
diesel fuel for backup generators that operate the water and sewer
systems. Southland
Tube Inc. in Birmingham, Ala., came through Katrina unscathed, but
President and CEO John R. Montgomery worries about his service center
customers in New Orleans and along the coast. “We hope the
power companies react quickly and get our customers up and going
again.” Meanwhile,
the Association of Steel Distributors, which was to meet Oct. 15-17
at the Royal Sonesta Hotel in New Orleans’ French Quarter,
is scrambling to find another host city. The National Association of Steel Pipe Distributors has also been on the phone to relocate its March 2006 meeting, which was set for New Orleans. Executive director Susannah Porr remarks, however, “That’s the least of anyone’s problems right now.” How
Will Imports, Exports Be Affected? About
100 freight trains a day serve New Orleans. Rail traffic was detoured
as far north as Chicago, but limited service has returned. “This
hurricane will have a tremendous impact on the U.S. economy and
freight transportation,” authorities at the Ports of Indiana
said Sept. 1. Indiana officials expect disruptions in some outbound
shipments of steel, iron ore and minerals, among other commodities. Some
shippers said they expect to reroute goods to Great Lakes ports.
Indiana port authorities are offering to help. “Because Burns
Harbor handles similar cargoes and can also transload between ocean-going
ships and river barges, there is potential for it to serve as a
trans-shipment point from the north much like New Orleans does from
the south,” they said. Port
companies have had inquiries from steel traders that regularly ship
through Burns Harbor and New Orleans about diverting more steel
shipments through Lake Michigan for inland distribution from the
north end of the Mississippi River system. Experts say the cost of diverting shipments from the Port of New Orleans, plus the additional trucking costs involved, especially as fuel prices rise, will be difficult to determine. Dofasco
to Buy Copperweld Businesses Atlas
will acquire the shares of Copperweld Holding Co., after which Dofasco
will immediately purchase, from Atlas, assets related to Copperweld’s
mechanical tubing and automotive components businesses for a total
around $177.8 million. These
assets include manufacturing facilities in Woodstock, Brantford,
London, Brampton and Mississauga, Ontario, as well as Shelby, Ohio,
and Elizabethtown, Ky. The closing of this second transaction is
expected to occur in the fourth quarter. Copperweld’s
businesses will be integrated with Dofasco’s existing tubular
steel business. Dofasco makes large-diameter, thin-walled tube for
hydroforming applications to the auto industry, and supplies non-hydroform
and fabricated tubular products from facilities in Ontario, Ohio
and Mexico. “Integrating
Copperweld’s capabilities into Dofasco’s tube division
is expected to accelerate Dofasco’s growth to become a North
American leader in the supply of specialty tube products for both
mechanical and automotive customers,” says Don Pether, president
and CEO. “This
acquisition provides an excellent opportunity to increase our product
range in the automotive market, and to expand into non-automotive
niche markets for tubular products, which will represent approximately
30 percent of the shipments of the combined businesses.” ITC
to Conduct Sunset The
commission will conduct full reviews to determine whether revocation
of these orders would be likely to lead to continuation or recurrence
of material injury to domestic suppliers within a reasonably foreseeable
time. The commission will issue a report after it completes its
reviews. Mittal
Restarts One Furnace, Idles Another Mittal
Steel restarted blast furnace C-6 at Cleveland Works on Aug. 23
in preparation for the scheduled idling of Cleveland’s other
ironmaker, blast furnace C-5, in October. The company took C-6 out
of production in May, accelerating maintenance that had been scheduled
to be performed later, in response to inventory-related market softness.
Similarly, C-5 will be idled in order to perform extensive repairs
to the furnace top. The
overlap also will enable Cleveland Works to cover the company’s
steelmaking needs during an upcoming 20-day maintenance outage at
Sparrows Point near Baltimore, where a complete reline is needed
at one of the Maryland plant’s basic oxygen furnaces. “This
is another example of our plants working together to meet customer
requirements,” says William Brake, executive vice president,
operations east. After repairs are completed, C-5 will be returned
to service as soon as the order book indicates it is needed, he
adds. Stelco
Finds Buyer for Stelpipe The
transaction, subject to conditions including court and lender approval,
could close by the end of October. Romspen
will assign the agreement to a new wholly owned subsidiary, Lakeside
Steel Corp. Ltd., under which Stelpipe’s current facilities
would continue to operate, retaining nearly all of Stelpipe’s
470 workers. As part of the deal, Stelco will assume all pension
and benefit obligations of Stelpipe’s retirees. Courtney
Pratt, Stelco’s president and CEO, says the sale will provide
Stelpipe with ownership that views its business as a strategic asset.
“It provides Stelpipe employees and retirees with increased
certainty going forward. And it assists Stelco in focusing on the
integrated steel business at the heart of our strategic plan.” CMC
Buys Mexican The
Juarez facility will join CMC’s joist manufacturing group operating
as SMI Joist with facilities in Hope, Ark.; Starke, Fla.; Iowa Falls,
Iowa; Fallon, Nev.; and Cayce, S.C. The
newly acquired facility and equipment will allow SMI Joist to expand
its territory in the southwestern United States and northern Mexico
and provide customers with even better delivery. This
facility is owned by CMC Fabricators Inc. and will operate as part
of CMC’s Domestic Fabrication operating segment. “This
acquisition will improve our opportunity to grow in the region,
and position Commercial Metals for a growing market as demand for
joists increase in Mexico,” says Karl Schoenleber, divisional
manager for CMC’s Joist Division. Crucible
Materials to Upgrade The
special tilt-furnace design will handle higher throughput, require
less maintenance and be more energy efficient than any of the high-temperature
furnaces currently in operation. Installation of the new furnace,
scheduled for the first quarter of 2006, will expand the high-temperature
annealing and heat-treating capacity by 35 percent. Additional capital
will be allocated to improve oil quenching as well as material-handling
equipment. Together,
these upgrades will allow Crucible to meet the increased market
demand for stainless long products, company officials say. IPSCO
Expands Heat-Treat Capacity Overall,
capacity of the Calgary heat-treat facility will rise by more than
70 percent per year. The expansion in heat-treat capacity will begin
immediately and is expected to be fully implemented before the year
ends. The
product range improvements will enhance the production of casing
from the current 4 1/2- to 9-inch diameters to include additional
diameters from 10-3/4- through 13-inch in high collapse, N, L, P
and Q grades as well as IPSCO proprietary grades. The
enhancements will include equipment and process modifications to
enable production of heat-treated tubing in 2- through 3 1/2-inch
diameters. The necessary equipment and process modifications to
expand the product range are expected to be complete in the fourth
quarter of 2005 with full production expected in the first quarter
of 2006. The
cost of expanding the OCTG heat-treat capacity and expanding the
casing product range are included in IPSCO’s 2005 capital expenditure
forecast of $100 million. “The
improvements are designed to position IPSCO for further growth in
energy tubular product markets by taking advantage of the increased
North American demand for high-grade heat-treated products,”
explains Joe Russo, senior vice president. “We believe these
improvements will better serve our customers through expanded product
options.” WCI
Steel Files Reorganization Plan Edward
R. Caine, vice chairman and chief restructuring officer, says the
Renco-sponsored plan contains a substantial cash infusion, assumption
of current pension obligations and a ratified labor agreement with
the United Steelworkers of America—all of which provide the
company with financial strength and flexibility. “We
are grateful to Renco for stepping forward with the financial resources
necessary to submit a plan to the court that will allow WCI to emerge
from Chapter 11 as a viable, independent company,” Caine says.
“We also appreciate the continued support of the United Steelworkers
as we proceed through the reorganization process.” WCI
filed a voluntary petition for Chapter 11 protection in September
2003. Precision
Castparts Agrees to Acquire Special Metals Corp. Other
than producing some billet at its WASA facility in Australia, Precision
currently buys all of its billets from outside sources. As a high-volume
consumer of premium-grade nickel, “we can see significant top-
and bottom-line benefits through increasing SMC’s volume, improving
their yields and decreasing the overall lead time to the marketplace,”
Donegan says. Special
Metals will both strengthen and diversify Precision Castparts. Along
with holding well-established positions in aerospace and power generation,
SMC makes a comprehensive small-diameter pipe product line, which
will enable Precision to continue its own penetration of the seamless,
extruded pipe market. Further,
SMC opens up new opportunities in adjacent markets, such as the
chemical, oil and gas, and pollution control industries, “all
of which present exciting growth potential,” Donegan says. The
transaction has been approved by the boards of both companies, as
well as by holders of more than 90 percent of the common stock of
SMC. Subject to regulatory approvals, the transaction is anticipated
to close in the company’s 2006 third fiscal quarter. Briefs The
Specialty Alloys Operations unit of Carpenter Technology Corp. has
announced that it will increase base prices 10 percent on all precipitation
hardening stainless steels in strip form, effective Sept. 1 for
all new orders. Raw material surcharges remain in effect. Allegheny
Ludlum added a $160 per ton surcharge to its silicon electrical
steel invoices effective with shipments beginning Sept. 1. The
East Troy Cold Work Anneal Plant of Plymouth Tube Co. has shipped
the final orders of SEA-CURE, a heat exchanger tubing, to the Department
of Energy, a project that began in 2002. Plymouth’s SEA-CURE
is being used to re-tube 33 heat exchanger units at the DOE’s
Strategic Petroleum Reserve. The petroleum reserve is stored at
four sites along the Gulf of Mexico in a series of artificial caverns
within salt domes below the ocean surface. As the crude is stored
at high temperature, it needs to be cooled prior to being pumped
into the pipeline. The 33 heat exchangers are used to do this. Heat
exchangers at the petroleum reserve began to corrode and leak in
the 1970s as a result of high chlorides and high microbiological
activity in the brackish water used to cool the crude. Members
of United Steelworkers Locals 8794 and 7940, who work at Ivaco Inc.’s
steel mill in Hawkesbury, Ontario, voted to strike by Sept. 16 in
the wake of failed negotiations with the company to arrive at a
new labor contract. Local 8794 President Richard Leblanc says a
strike is not the goal, but it will be the consequence if Ivaco’s
parent company, Heico Companies LLC, refuses to withdraw concessions
from the bargaining table. Galvasid
S.A. de C.V., Monterrey, Mexico, is building a new plant in Apodaca,
Nuevo León. The plant will include a pickling line, cold-rolling
mill, galvanizing/painting line, two roll-forming lines, a multi-blanking
line and a slitting line. Red Bud Industries is supplying the multi-blanking
and slitting lines as well as entry equipment for the roll-forming
lines. The multi-blanking line can process 0.135-inch-thick, 72-inch-wide
coils weighing up to 67,000 pounds. The line includes Red Bud’s
CNC programmable slitter. The slitter will be capable of producing
blanks with width and length tolerances of plus or minus 0.005-inch.
The entry equipment for the roll-forming lines will include two
reel/coil stage and load systems capable of handling coils up to
60 inches wide, weighing up to 60,000 pounds. Obituary People Salvatore
J. Miraglia Jr. has been appointed president-Steel, at The Timken
Co., Canton, Ohio, succeeding Ward J. “Tim” Timken Jr.
Miraglia is responsible for the Steel Group, which reported $1.2
billion in sales in 2004. A veteran of Timken since 1972, he served
most recently as senior vice president-technology. James
Cowan, president and chief operating officer of Maverick Tube Corp.,
St. Louis, resigned Aug. 30. He was with the company for more than
two years. C. Robert Bunch, chief executive officer, assumed the
title of president. The company had no immediate plan to fill the
position of chief operating officer. U.S.
Steel Corp. promoted Frederick G. Jauss to general manager of Great
Lakes Works in Ecorse and River Rouge, Mich. A metallurgical engineer,
Jauss joined U.S. Steel in 1968 and served in several increasingly
responsible management posts in metallurgy and quality control at
Fairless, Gary Works and Fairfield Works. Most recently, he was
plant manager of finishing operations at Gary Works. Jauss succeeds
Frederick T. Harnack, who has been named general manager of research
at Pittsburgh. Sharon
K. Kelley has been named manager of U.S. Steel’s Midwest Plant
in Portage, Ind., and William J. Kelly has been named plant manager
of finishing operations at Gary Works. Sharon Kelley joined U.S.
Steel in 1978 and has since served in a number of key operating,
quality assurance, and sales and marketing functions, most recently
as general manager-automotive sales and vice president of U.S. Steel
International. She succeeds John Price, who has become general manager
of business planning. William Kelly joined U.S. Steel in 1975 and
held supervisory positions in several areas, was a plant manager,
general manager of business process reengineering and directed operations
for Straightline Source. Most recently, he was division manager
of sheet products at the Midwest Plant. Peter
J. Alvarado has been named general manager-automotive at U.S. Steel
Corp. and vice president of U.S. Steel International. He oversees
steel sales to automotive manufacturers and the development of new
steels geared to the automotive industry. He succeeds Sharon Kelley.
Alvarado joined U.S. Steel in 1981 as a metallurgical engineer,
worked in marketing and sales, and most recently was director of
sales for automotive transplants. Thomas Filstrup has joined IPSCO Inc. as director of investor relations. He brings nearly 20 years of investor relations management experience, most recently as director of investor relations at Whirlpool Corp. He has long served in key roles with the National Investor Relations Institute. |
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