| July 2007 |  |
| Metal Industry News | |
|
|
|
Steel Dynamics to Acquire The Techs The Techs business operations consist of three facilities, GalvTech, MetalTech and NexTech, each specializing in the galvanizing of specific types of flat-rolled steels. In 2006 the privately held company shipped 958,000 tons of galvanized steel and generated revenues of $811 million. The Techs specialize in non-automotive applications, serving a variety of customers in the HVAC, commercial construction and consumer goods markets. About 85 percent of its sales are to customers in the eastern U.S. and the Midwest. “The Techs represents an excellent opportunity for Steel Dynamics to expand its participation in the value-added steel coating business,” says Mark Millett, president and COO for Flat Rolled Steels and Ferrous Resources. “Its management and employees have done a fine job building an outstanding company by focusing on quality and service, resulting in a very loyal non-automotive customer base. “This additional business complements our three existing galvanizing lines at Butler and Jeffersonville, Ind., which utilize steel sheet produced at our Butler mill. Like our existing operations, these plants process both hot-rolled and cold-rolled steel in a range of gauges. This acquisition will approximately double SDI’s hot-dip galvanizing capacity,” Millett adds. Steel substrate used by The Techs is expected to continue to be supplied by a variety of nearby suppliers, which have also, in the past, included SDI. The Techs’ three modern, efficient facilities, constructed in 1984, 1990 and 1996, have a combined annual galvanizing capacity of about one million tons. Together, the three non-union facilities employ approximately 225 people. The plants will operate under their current management as The Techs, an independent Steel Dynamics business unit reporting to Millett. Cold Mill Operational at SeverCorr “Our commitment to invest in only the best-available technology can easily be seen in our cold mill. The term state-of-the-art is often overused, but it is an accurate description in this case,” says Mike Wagner, chief commercial officer. Total capacity of the line is over 1.2 million tons, of which 650,000 tons will be used to produce cold-roll products including commercial, drawing, deep drawing, interstitial-free ultra-low carbon and micro-alloyed grades of steel, as well as full hard products. The mill’s additional capacity will be substrate for the facility’s galvanizing line, which will come on-line in third-quarter 2007. Features of the cold mill include a closed-loop flatness control system for improved strip profile; closed-loop AGC for superior gauge performance; CVC work rolls for enhanced shape control; and an advanced emulsion system to ensure excellent strip cleanliness. Cold mill operations also include the successful start-up of the batch anneal furnaces and the temper mill, giving SeverCorr the ability to produce both full hard and fully processed cold-roll. The cold mill is the second major production area to come online at SeverCorr following the launch of the pickling line earlier this year. Other production areas, including the hot mill and galvanizing line, will be brought into production in coming months as construction is completed. SeverCorr was formed in 2003 to design, engineer, build and operate a state-of-the-art steel facility to service growing manufacturing opportunities in the southern U.S. In October 2005, SeverCorr broke ground on the Mississippi mill. When complete in the third-quarter of 2007, the plant will produce 1.5 million tons of high-quality steels per year for use in the automotive, building, agricultural, pipe and tube, and appliance industries. A unique feature of the company is its 1400-acre mega-site, which has been designed to accommodate production partners and related manufacturers onsite. Carpenter Breaks Ground “This investment further strengthens Carpenter’s position in specialty materials manufacturing, and demonstrates its confidence in domestic production and commitment to the community,” says company Chairman, President and CEO Anne Stevens. Expansion of the company’s melt capacity and related infrastructure, which is expected to be completed by mid-fiscal year 2009, is part of approximately $200 million in capital expenditures that the company will make over the next four years under the strategic plan it announced in September 2006. Premium melting is the first step in producing Carpenter’s specialty alloys for critical applications used in the aerospace, energy, medical and automotive markets. The premium melt expansion will allow the company to meet the demand expected over the next several years from those key end-use markets. Carpenter believes that more than $500 million of organic growth opportunities in its highest margin business exist over the next several years in those markets, which require high performance products made to exacting specifications for critical applications that cannot be easily substituted. The premium melt expansion will complement Carpenter’s existing melting, forging and finishing operations. These operations are being enhanced with laser technology welding for strip finishing and centerless turning equipment for bar finishing. “This expansion of our premium melt capacity reflects the increasing demand for premium alloy materials that is at the heart of Carpenter’s growth plan,” says Stevens. “The investment is a continuation of our strategy to focus on higher value materials that have applications in niche markets.” The company expects the investment will generate approximately $150 million of additional revenue from the sale of higher-value products by fiscal year 2010 and provide significant returns on the capital invested. At the core of the company’s premium melt capacity expansion program will be an approximate 40 percent increase in its vacuum induction melting capacity. VIM furnaces are typically used in the first melting step to produce materials for demanding applications, such as high-temperature and highly corrosive environments, high purity alloys for medical procedures, and specialty applications in automotive and truck. The expansion program also includes four vacuum arc remelting furnaces and two electro-slag remelting furnaces. Steel Dust Recycling Plant to Service South “Approximately 40 percent of the steel dust being generated annually in the U.S.—over 400,000 tons—is currently being placed in landfills, a problem that is especially acute in the South, where the steel industry is growing,” says Russ Robinson, president of SDR. “We’re filling a need for an effective alternative to sending steel dust to landfills, and the Waelz Kiln is recognized as the best available recycling technology” Waelz Kiln technology will recover the zinc from the dust and provide the zinc-rich Waelz oxide to smelters in North America and around the world. The remaining steel-based slag is then often used by cement producers or for road aggregate. “We are pleased SDR is offering recycling as a viable solution for disposing of steel dust,” says Wynn Calland, vice president of regulatory affairs at SeverCorr, which has a multi-year contract with SDR. “They share SeverCorr’s regional focus and are bringing a much-needed service to the Southern steel industry.” The Waelz plant will be constructed and operated under the guidance of Robinson, a 25-year veteran of the zinc industry, and Tom Knepper, a Waelz expert with over 30 years experience in kiln operations. Construction of the facility is expected to be completed next year. Nucor to Acquire Magnatrax Operating through its seven fabricating plants along with the associated engineering service centers and transportation facilities located in various parts of the U.S., Magnatrax is a leading provider of custom-engineered metal building systems for the growing North American non-residential construction market. Via its American Buildings Co., Kirby Buildings Systems, Gulf States Manufacturers and CBC Steel Buildings subsidiaries and divisions, Magnatrax primarily sells, engineers and fabricates custom metal building systems, which include primary and secondary wall and roof panels, trim and accessories. Magnatrax also offers architectural metal roofing systems for new and retrofit construction, sells third-party metal building components and provides related transportation services through additional subsidiaries and divisions. “The acquisition of Magnatrax is an important growth opportunity for one of our core downstream businesses,” says Dan DiMicco, Nucor’s chairman, president and CEO. “Although Nucor is already a major national player in the metal buildings business, the addition of the Magnatrax brands, facilities and, most importantly, people, significantly enhances Nucor’s market position.” Kaiser Doubles Plate Capacity in Three Years The $34 million follow-on investment, when coupled with $105 million of investments announced in October 2005 and August 2006, will more than double Kaiser’s previously available plate capacity. “Demand continues to remain strong for aerospace, defense and general engineering applications, and a further investment to expand our heat treat plate capacity enables us to serve the growing needs of our customers,” says Jack A. Hockema, chairman, president and CEO. “This additional expansion is supported by solid customer commitments.” “The previously announced phases of the heat treat plate project remain on schedule,” adds Hockema. “Two heat treat furnaces were fully operational in the first quarter of 2007, and the stretcher and the third heat treat furnace are expected to be on-line early next year. We expect this incremental $34 million expansion to be fully operational by the end of 2008.” LME to Trade Billets; First Foray LME officials say this marks the start of the exchange’s offering of price risk management tools to the steel industry, and follows a period of extensive consultation with LME members and industry officials. “There are many ways in which price risk management tools can be delivered to the steel industry,” says Martin Abbott, LME chief executive. “Our physically-delivered steel billet contracts are the first, of what could be several, steel contracts offered by the LME. In providing this service, we are building on the credibility and experience we have developed in over 130 years of base metals trading and physical delivery, as well as the vast knowledge and distribution mechanism represented within the LME member firms.” “Like all contracts, the steel billet contracts will take time to build, but there is a real appetite for this offering from our members, their clients and from those in the steel industry who already recognize the value of price risk management tools. For those who don’t yet see the benefits, the LME will commence a thorough program of education,” adds Liz Milan, LME steel business manager. Chief executives at several major steel producers have gone on record with their opposition to the trading of steel futures, however. ArcelorMittal to Hold Line on Prices in Europe “Despite robust economic growth in Western Europe, a continuously buoyant steel market in Eastern Europe and increasing tension on the iron ore and scrap markets, we do not intend to increase our prices in Q3 in order to maintain a sustainable market environment for our customers and a healthy inventory level,” says Christophe Cornier, CEO of ArcelorMittal’s Flat Carbon Europe division. The company remains confident about the demand for carbon steel products in Europe for the second half of the year. “Our forecast for auto, construction, mechanical equipment, power generation, oil and gas and the tube industry in Europe is very robust. We expect that this year will continue as strongly as it has started,” Cornier says. ArcelorMittal also announced that its output to the European market will be 3 to 4 percent lower in volume in the third quarter, compared to the second quarter, as a result of mill outages related to necessary repair and inspection work. This will help reduce the level of inventory in the market, which is slightly inflated due to a recent surge of imports, say company officials. In other action, ArcelorMittal unveiled its brand identity and design. To reflect the company’s values and aspirations, the brand is based on the theme of “Transforming Tomorrow.” Supporting that central positioning are three main values: Sustainability, Quality and Leadership. “We are announcing what ArcelorMittal stands for, what it intends to achieve and by what values and guiding principles we are going to operate,” says Lakshmi Mittal, president and CEO of ArcelorMittal. “We wanted a positioning that not only reflects the strategy of the business, but also reflects the responsibility we have as the leading player in our sector and also one of the world’s largest companies.” Alcoa Completes Soft-Alloy The joint venture involves the contribution of Alcoa’s soft-alloy extrusion business into a joint venture company, Sapa AB, which will be the world’s largest aluminum profile company with annual sales of approximately $4.5 billion and 12,000 employees. The new company is majority owned and operated by Sapa, based in Stockholm, Sweden. Last November, Alcoa announced its plan to fold its soft-alloy business into a joint venture company with Orkla, with the intention of eventually offering an IPO of the combined entity. Alcoa has 22 soft-alloy extrusion facilities in eight countries with 6,400 employees. Sapa Profiles has 18 facilities in 12 countries. Perforated Sheet Metal Supplier Perforated Metals Plus has been servicing customers in Charlotte, N.C., and throughout the United States for 15 years. The decision to relocate comes at a time when the two companies are experiencing record growth. “This is a smart move for us,” says Rusty Flack, Diamond chairman and CEO. “Charlotte is centrally located to some of our key customers and this expansion will allow us to better service them while we position ourselves for future growth.” Briefs Pacific Coast Steel, a Gerdau Ameristeel joint venture, has agreed to purchase the assets of Valley Placers Inc., a reinforcing steel contractor in Las Vegas, Nev. In addition to contracting activities, VPI operates a steel fabrication facility and retail construction supply business in Las Vegas. VPI currently employs more than 110 field ironworkers and specializes in smaller commercial, retail and public works projects. “This further supports our approach to strategically grow our downstream operations in the West. VPI can be supported by our recently purchased mill in Oklahoma, and will easily roll into the PCS organizational structure,” says J. Neal McCullohs, vice president of commercial and downstream operations for Gerdau Ameristeel. Northwest Pipe Co., Portland, Ore., was named as pipe supplier by Mountain Cascade Inc. of Livermore, Calif. for the Freeport Regional Authority Project near Sacramento, Calif. The company will supply approximately 27,000 feet of 84-inch diameter steel pipe valued at $11 million for an engineered and custom fabricated piping system to be installed in the project. Northwest was also named as pipe supplier by Garney Construction Co. of Kansas City, Mo., for a water transmission pipeline for Johnson County Water District, where it will supply approximately 28,000 feet of steel pipe valued at $8 million. Russia’s Norilsk Nickel has achieved regulatory approval, clearing the way for its all-cash acquisition of Toronto-based LionOre Mining International Ltd. Norilsk’s offer is valued at approximately $6.8 billion Canadian. Norilsk is the world’s largest producer of nickel and palladium, and one of the world’s largest producers of platinum and copper. Century Aluminum Co. has signed a memorandum of understanding with the Guangxi Investment Group Co. to explore the feasibility of developing a high purity aluminum reduction project and related bauxite and alumina supplies in China. The project is targeted for Laibin, in the Guangxi Zhuang Autonomous Region, one of China’s largest bauxite reserve areas. The project would consist of a 500,000 metric ton aluminum smelter that would be constructed in two phases, and which would supply an integrated aviation and alloy products facility that GIG is developing. United Company RUSAL, the world’s largest producer of aluminum and alloys, has started construction of the Taishet aluminum smelter in the Irkutsk region. The smelter’s annual capacity will total 750,000 metric tons of aluminum. The smelter’s first batch of aluminum will be produced in November 2009, and completion of the smelter is scheduled for the fourth quarter of 2011. Implementation of this project will allow the company to increase aluminum output by over 19 percent. Shareholders of Canada’s Algoma Steel Inc. have approved the company’s acquisition by a subsidiary of Essar Steel Holdings Ltd. for a cash price of $56 per share. Algoma Steel Inc. is an integrated producer of hot- and cold-rolled sheet and plate based in Sault Ste. Marie, Ontario. General Steel Holdings Inc., China’s first U.S. publicly traded steel company, has entered into a joint venture agreement with Shaanxi Longmen Iron & Steel Group Co. Ltd. The venture will be located in Shaanxi province, the bridgehead for development in China’s Western Region, and produce rebar and infrastructure-related steel products. Initial capacity for the site will be 3 million annual metric tons. Former U.S. Secretary of Transportation Norman Y. Mineta and Michael Gallis, the country’s leading expert in large-scale regional development strategies, will be featured speakers at the fifth annual Indiana Logistics Summit, Sept. 25-26, in Indianapolis. The Indiana Logistics Summit will be hosted by the Ports of Indiana, Purdue University and the Central Indiana Corporate Partnership at the Indianapolis Marriott Downtown. About 11,000 tons of hot-rolled steel coils from Mittal Steel in East Chicago, Ind. set sail for Spain last month from the Port of Indiana-Burns Harbor. This is the first export shipment of steel through the Port of Indiana since 2005. “Historically, the majority of steel moving through the port is imported from European countries,” said Ian Hirt, general manger of Federal Marine Terminals, “but changing market conditions and a weak U.S. dollar can trigger export opportunities. There is a possibility for more export shipments this year.” The Timken Company, Canton, Ohio, has announced price increases on double and triple thermal treated product. Effective with shipments Jan. 1, 2008, the following applies: bar product prices will increase by $50 per ton, and tubing product prices will increase by 10 percent. Raw material surcharges will remain in effect. At this time, prices on as-rolled and single thermal treated products are not affected. Weller Machinery Co. has been appointed exclusive distributor for W.A. Whitney fabricating machines in the state of Wisconsin. W.A. Whitney offers a comprehensive line of cutting and forming equipment for the metal plate fabrication market. The Expanded Metal Manufacturers Association elected a new chairman and vice chairman at it’s spring conference in Tucson. The new EMMA chairman is Mike Fernie of Fisher & Ludlow, Burlington, Ontario, Canada. The new vice chairman is Rod Miller of Spantek Expanded Metal, Hopkins, Minn. Other EMMA members companies include: Alabama Metal Industries Corp., Exmet Industries Inc., Expanded Solutions L.L.C., New Metals Inc. and Niles Expanded Metals & Plastics. Century Aluminum Co., Monterey, Calif., has named Jerry Reed vice president of business development. In this position, he will be focused on expanding the company’s business interests in primary aluminum production, alumina refining and bauxite mining. David J. Kjos has been named Century’s vice president of operations-Iceland, with direct responsibility for the company’s Nordural facility in Grundartangi, Iceland. Cliff Ankersen has joined ESAB Cutting Systems, Florence, S.C., in the role of Laser & Waterjet Systems Product Manager. Ankersen is responsible for marketing, sales and product management of the laser and waterjet product lines and serves as ESAB’s primary technical resource on waterjet and laser products and processes. |
|
Questions or comments about Metal Center News. E-mail feedback@metalcenternews.com