U.S. Steel Expands Tubular Goods
Reach with Purchase of Lone Star
United States Steel Corp., Pittsburgh, will acquire Dallas-based Lone Star Technologies Inc., a manufacturer of welded oilfield tubular goods. The agreement was unanimously approved last month by the boards of both U.S. Steel and Lone Star.

U.S. Steel expects the acquisition of Lone Star to strengthen its position as a premier producer of tubular products for the energy sector and will create North America’s largest tubular producer. The transaction will broaden U.S. Steel’s energy product offerings by joining U.S. Steel’s predominantly seamless tubular business with Lone Star’s complementary welded tubular business, coupling manufacturing and tubular processing services. Following the transaction, U.S. Steel will have annual North American tubular manufacturing capability of approximately 2.8 million tons.

“This transaction represents a compelling strategic opportunity for U.S. Steel to strengthen our position as a supplier to the robust oil and natural gas sector by significantly expanding our tubular product offerings, our production capacity and our geographic footprint,” says U.S. Steel Chairman and CEO John P. Surma.

Under the terms of the definitive agreement, U.S. Steel will acquire all of the outstanding shares of Lone Star for $67.50 per share in cash—an aggregate value of approximately $2.1 billion.

“With a comprehensive portfolio of high-end products, enhanced production capabilities, excellent positions in both welded and seamless pipe, and a strong commitment to quality, service and innovation, U.S. Steel will be better positioned to serve the international oil and natural gas industry,” Surma says.

Additionally, he adds, since Lone Star is a significant purchaser of hot-bands and slabs, the acquisition should allow the company to optimize its domestic hot-end operations.

“Our complementary strengths will better position Lone Star to pursue significant new growth opportunities,” says Rhys Best, chairman and CEO of Lone Star.

Esmark, Wheeling-Pitt Combination Finalized
The combination of steelmaker Wheeling-Pittsburgh Corp. and service center company Esmark Inc., Chicago Heights, Ill., has been finalized.

The agreement to combine Wheeling-Pitt and Esmark provides for the formation of a new company, to be called Esmark Inc. Under terms of the combination, existing Wheeling-Pitt shareholders will receive one share of New Esmark stock for each share of WPSC stock.

The new company will be led by James P. Bouchard, who will serve as chairman of the board and CEO, and Craig T. Bouchard, vice-chairman and president. The board will be comprised of all of the existing Wheeling-Pittsburgh directors, and Esmark will have the right to appoint two additional directors.

“This marks an important milestone in our vision to build the most efficient downstream steel production and distribution company in the U.S.,” says James Bouchard. “By blending the minimill, service center, converter and finishing assets of the two companies, we expect to be able to offer our customers across the Midwest a low-cost production and just-in-time delivery method unrivaled in the domestic steel industry.”

Bouchard added that the proposed combination could not have happened without the full support of the United Steelworkers of America and believes that the merger is in the best interests of Wheeling-Pitt’s employees and the Ohio and Monongahela Valley communities.

“We are achieving strong support on Wall Street by supporting our strategic vision with blue chip investors, the finest mill partnerships, reconstructing raw material supply relationships, and assembling a very large customer base,” says Craig Bouchard. “Our goal is to create a next-generation steel services company poised for growth.”

Wheeling-Pitt’s fourth-quarter 2006 financial report showed a net loss of $18.1 million, an improvement on the $23.4 million loss posted during the final quarter of 2005. For the year, Wheeling-Pitt posted net income of $6.5 million, reversing the $18.1 million loss of 2005.

Net sales for 2006 totaled $1.77 billion, 13.4 percent better than the $1.56 billion totaled in 2005.

Net sales in the fourth quarter were down 3.8 percent to $357.1 million.

“Clearly, the company’s 2006 results were a disappointment. We began our jobs of turning this company around on Dec. 4. We have reconstructed the management corps at the company and they are doing their jobs well,” James Bouchard said. “We will convert this company into the most efficient downstream steel production and distribution company in the United States.”

Mittal Building Polish Service Center
Arcelor Mittal, based in Luxembourg, announced plans to build a new steel service center in Krakow, Poland. The facility will have processing capacity of 450,000 tons per year and is expected to strengthen existing service center operations in Poland, bringing capacity close to 1 million tons per year. The facility is expected to open early in the fourth quarter.

Arcelor Mittal officials say the development anticipates the expected transformation of the Polish steel market over the coming years, in size as much as in quality and service standards. Equipment will incorporate two de-coiling lines, one for hot-rolled coils and one for cold-rolled and coated material, as well as a slitting line.

“The fast and efficient implementation of such organic growth projects in Central and Eastern Europe is facilitated by the successful integration of Arcelor Mittal in Europe,” says Philippe Darmayan, CEO of Arcelor Mittal Steel Solutions.

Chaparral Reports Increase in Fourth-Quarter Income
Chaparral Steel Co., Midlothian, Texas, reported third-quarter net income of $62.5 million, a 27 percent increase over the $49.2 million posted during the same period in fiscal year 2006. The total was the second-best quarterly figure in company history, trailing only the $67.5 million set in the previous quarter.

“This was the second best quarter in our company’s history in what is usually our seasonally slowest quarter,” President and CEO Tommy A. Valenta told investors during the company’s quarterly conference call. “We continue to see strong domestic and international demand for structural products and improving global prices going into the busier construction season.”

Shipments of 567,000 tons made for the fourth-best quarter in the company’s history. Shipments were similar to the third quarter of fiscal 2006 and were up almost 5 percent from the previous quarter. Average selling prices of $679 per ton increased $79 from the third quarter of fiscal 2006 and were down slightly from the second quarter of the year. Average metal margins of $490 per ton were 16 percent higher than the third quarter of fiscal 2006 and similar to the previous quarter.

Keystone Buys CaluMetals
Keystone Consolidated Industries Inc., Peoria, has acquired the operating assets of Chicago Heights, Ill.-based CaluMetals, a manufacturer of merchant and special bar quality products and special sections in carbon and alloy steel grades. CaluMetals shipped approximately 17,000 tons of products and had $10.9 million in net sales in 2006.

Keystone expects to provide the majority of the billet requirements of the acquired operations from its Peoria facility. Keystone officials say the acquisition allows the company to further enhance its vertical integration strategy by converting more of its current billet production into higher-margin products.

Purity Metal Holdings Purchased by Kennametal
Kennametal Inc., Latrobe, Pa., has agreed to acquire Purity Metal Holdings Inc., and its wholly owned subsidiary International Specialty Alloys Inc. ISA manufactures high-purity specialty metal products for the aerospace, defense and super alloy industries.

ISA will become part of Kennametal’s Advanced Materials Solutions Group. Kennametal’s growth strategy includes expanding AMSG to eventually represent 50 percent of the business.

“ISA will add its own state-of-the-art, proprietary manufacturing equipment, processes, technologies and skills to Kennametal, enabling us to offer added value to our customers,” says Jim McRickard, vice president and general manager of Kennametal’s engineered products group. “ISA offers us expansion into new markets and, in turn, we can leverage Kennametal’s global strength to expand ISA’s capabilities into new geographies.”

Timken Expanding Small-Bar Rolling Mill
The Timken Company has completed sourcing of major equipment purchases for the $60 million expansion of its small-bar rolling mill at the Harrison steel plant in Canton, Ohio. Timken will employ a sizing mill with an automatic roll-gap system from SMS Meer GmbH. The expansion, which is expected to be complete in mid-2008, will enable Timken to competitively produce bars down to 1 inch in diameter.

Additionally, Timken has announced an expansion of its rolled carbon and alloy steel round bar capabilities. The company can produce a maximum diameter of 15 inches.

“The technological advancements that make this new 15-inch product line possible are part of our strategy to bring new and differentiated product solutions aimed at improving our customers’ performance,” says Rick Brown, director of advanced product and new business development for Timken’s Steel Group.

Trumpf Opens Facility in Monterrey, Mexico
Trumpf, Farmington, Conn., has opened a new sales, service, demonstration and production facility in Monterrey, Mexico. The 6,400-square-meter production building is used to build frames for Trumpf machinery.

“A new production building built in the Apodaca Technology Park is a testament to the long history and bright future of Monterrey in the Mexican metal industry,” says Claudio Schutz, general manager of TRUMPF Mexico. “The project shows Trumpf’s long-term commitment to the local growth and success of customers in Mexico.”

The company has invested more than $10 million dollars in the advanced manufacturing facility and sales and application center, which is open to Mexican fabricators and manufacturers for tours and technology demonstrations. 

Additionally, Trumpf has received a Connecticut Quality Improvement Award Silver Level Innovation Prize for its production of the TruLaser 2025. It marks the fifth straight year Trumpf has won a CQIA award.

Also, Trumpf has named Precision Technical Sales LLC as the manufacturer’s representative for the company’s products in New York, New Jersey, Pennsylvania, Delaware and New Jersey.

Kaiser Sales, Income Jump in Fourth Quarter
Kaiser Aluminum Corp., Foothill Ranch, Calif., reported net sales of $336 million in the fourth quarter, a 23 percent increase from the same period in 2005. Quarterly net income totaled $11.9 million, far surpassing the $1.14 billion loss during the same period in 2005. For full fiscal year 2006, the company reported net income of $3.2 billion.

“The company continues to deliver strong results, led by robust demand for aerospace and defense applications in our fabricated products segment,” said Jack A. Hockema, Kaiser chairman, president and CEO.

Kaiser also reported that the first phase of the Trentwood expansion reached full production during the fourth quarter, and the second phase became fully operational in first-quarter 2007. The entire project is expected to be in full operation by 2008.

CMC Purchase Expands Fabrication Operations
Commercial Metals Company, Irving, Texas, has agreed to purchase the assets of Nicholas J. Bouras Inc., United Steel Deck Inc., The New Columbia Joist Company and ABA Trucking Corp. The purchase, estimated at $63 million, does not include the Nicholas J. Bouras wholly owned subsidiary Prior Coated Metals and its affiliate Bouras Properties LLC.

“This acquisition is in line with our growth initiative and strategy of expanding downstream steel fabrication operations,” says Murray McClean, president and CEO of Commercial Metals Company. “In addition, the highly complementary fit of the Bouras facilities will strengthen our position as a significant supplier of steel joists throughout the United States by expanding our manufacturing capability to better serve the Northeast and Midwest markets.”

Also, CMC announced that its Polish steel mill, CMC Zawiercie, has purchased the shares of CMCZ owned by the Polish Ministry of State Treasury. The ministry retained minority interest in CMCZ at the time the mill was privatized in 1995.

Briefs
ThyssenKrupp Steel and Stainless USA, Troy, Mich., has filed permit applications in Alabama and Louisiana for its planned $2.9 billion facility in the United States. The filings were submitted to the state’s environmental agencies as required under the Clean Air act. “We are confident that our filings demonstrate ThyssenKrupp’s environmental know-how and our focus on the development of processes that are environmentally friendly and conserve resources,” says Robert P. Soulliere, president and CEO. ThyssenKrupp narrowed its potential sites to three in February, removing Arkansas from consideration.

Steel Dynamics Inc., Fort Wayne, Ind., has contracted Siemens to modernize its existing three-strand bloom/beam-blank casting machine at its Columbia City mill. The project, expected to be completed in the third quarter, includes the addition of a fourth strand.

Nucor Corp., Charlotte, N.C., was honored by Institutional Investor magazine as one of “America’s Most Shareholder Friendly Companies.” The poll of investment portfolio managers and brokerage firm research analysts also ranked Nucor first in the metals and mining industry.

Algoma Steel Inc., Sault Ste. Marie, Ontario, has terminated discussions with Salzgitter AG regarding a possible acquisition of Algoma. While discussions with Salzgitter were under way, other interested parties contacted Algoma expressing interest in acquiring the company. Algoma will be providing some of these parties with information about the company and entering into preliminary discussions.

Arcelor Mittal, has signed various agreements with the State of Senegal in West Africa to develop iron ore mining in the Faleme region of South East Senegal. The estimated reserves are approximately 750 tons, located in four locations in the Faleme region.

United Steelworkers at Allegheny Technologies Inc.’s Allegheny Ludlum and Albany facilities have ratified new four-year labor agreements. The new agreements run through June 30, 2011.

Members of the International Association of Machinists and Aerospace Workers, Local Lodge 1943, ratified a 54-month, labor agreement covering about 1,700 hourly production and maintenance employees at AK Steel’s Middletown (Ohio) Works. The new agreement took effect March 15 and runs through Sept. 15, 2011.

Arcelor Mittal, Luxembourg, and Noble International Ltd., North America’s largest producer of laser-welded steel products, have agreed to combine their laser-welded tailored blanks businesses.  The transaction is expected to be completed in June.

Dofasco Tubular Products, Brampton, Ontario, has selected the Quintiq Advanced Planning and Scheduling solution to optimize production processes. The system will be rolled out in all five Dofasco plants.

Metalico Aluminum Recovery Inc. has been issued an air permit for its new aluminum smelting plant in the Syracuse area, clearing the final regulatory hurdle for the company’s planned expansion in Central New York. Production at the facility is expected to begin in the spring and will have a capacity of up to six million pounds per month.

Gosiger Southeast, Ocoee, Fla., received an outstanding distributor performance award from Trumpf, Farmington, Conn. The award was presented based on sales of Trumpf laser marking products during the previous fiscal year.

People
Brian Hilcher has been appointed regional sales manager for Hans Weber Corp., Olathe, Kansas.

Adams Magnetic Products Co., Elmhurst, Ill., has added Jim Vitek as logistics manager, Sharon Rakowski as human resources manager and Adrianne Joyner as tradeshow coordinator.  

Gordon Gustafson has been elected president of the Midwest Association of Rail Shippers. He is the vice president and chief commercial officer for ADS Logistics LLC, Homewood, Ill.

The London Metal Exchange has appointed Robert Hall as the new head of physical operations.  He had been with the LME for 13 years, most recently as warehouse listings manager.

Trumpf Inc., Farmington, Conn., has appointed Shane Simpson as new product manager for bending products. He will be responsible for the company’s TruBend product line of press brakes.

Russia’s Norilsk Nickel has appointed Denis Morozov as the general director, replacing Mikhail Prokhorov who resigned. Morozov has been with Norilsk since 1999, most recently as deputy general director.

Richard D. Peach has been appointed deputy chief financial officer for Schnitzer Steel Industries Inc., Portland, Ore. Additionally, Jeff P. Poeschl has been appointed vice president and corporate controller for the company.

Derek G. Pannell has been appointed a director of Stelco Inc., Hamilton, Ont. Pannell is a metallurgical engineer with more than 35 years experience in the mining and metals industry.

Greer Steel has hired Scott McQuiston as director of research at its Dover, Ohio, facility. A 29-year veteran of the metals industry, McQuiston will focus on new product development for Greer.