ThyssenKrupp Seeks Southern Site
for Major New Carbon, Stainless Mill
ThyssenKrupp is searching for a site to build a new $2.9 billion steel and stainless steel manufacturing facility in the southern United States. The facility will be a joint venture of two group segments, ThyssenKrupp Steel and ThyssenKrupp Stainless, both based in Duisburg, Germany.

ThyssenKrupp has conducted extensive due diligence and negotiations with three states, Alabama, Arkansas and Louisiana, so far ruling out Arkansas based on the company’s careful selection criteria, which includes such factors as geological characteristics that would impact plant design and construction costs, energy costs and logistical considerations.

“ThyssenKrupp is committed to the new facility as the NAFTA market is an integral part of our overall global strategy,” says Jürgen Fechter, chairman of the executive board of ThyssenKrupp Stainless. In the coming years the North American market is expected to show above-average growth for both high-grade flat carbon steel and stainless steel products, he adds.

According to ThyssenKrupp officials, the facility will manufacture and process carbon steel and stainless steel for high-value applications by manufacturers in the United States and throughout North America. The plant will serve industries including automotive, packaging, construction, electrical and utility, in addition to serving manufacturers of appliances, precision machinery and engineered products.

The new facility will include a hot-strip mill that will be used primarily to process slabs from the company’s new steel mill in Brazil. The new U.S. plant will also feature cold-rolling and hot-dip coating capacity for high-quality end-products of flat carbon steel. The facility will have an annual capacity of 4.5 million metric tons of end products.

In addition, a stainless steel melt shop will be built with an annual capacity in the first phase of up to one million metric tons of slabs, which also will be processed on the hot-strip mill. A new cold-rolling facility will be designed initially to produce 325,000 tons of cold strip and 100,000 tons of pickled hot strip.

In addition, the stainless plant will provide ThyssenKrupp Mexinox in San Luis Potosí, Mexico, with required pre-material, 340,000 annual metric tons of hot-band.

ThyssenKrupp has not yet made a decision about the mill’s final location, but expects to complete the site selection process soon.

Novelis Agrees to Acquisition by India’s Hindalco
Novelis Inc., Atlanta, a leading producer of aluminum rolled products, has agreed to be acquired by Hindalco, India’s largest nonferrous metals company. Following the transaction, the combined entity claims it will be the world’s largest aluminum rolling company, one of the biggest producers of primary aluminum in Asia and India’s leading copper producer.

The all-cash transaction was valued at $6.0 billion, including approximately $2.4 billion in debt. Novelis shareholders will receive $44.93 in cash for each outstanding common share.

“After careful consideration, the board has unanimously agreed that this transaction with Hindalco delivers outstanding value to Novelis shareholders,” says Ed Blechscmidt, acting CEO of Novelis. “Hindalco is a strong, dynamic company. The combination of Novelis’ world-class rolling assets with Hindalco’s growing primary aluminum operations and its downstream fabricating assets in the rapidly growing Asian market is an exciting prospect.”

Based in Mumbai, India, Hindalco is the flagship company of the Aditya Birla Group, a $12 billion multinational conglomerate.

“The acquisition of Novelis is a landmark transaction for Hindalco and our group. It is in line with our long-term strategies of expanding our global presence across our various businesses and is consistent with our vision of taking India to the world,” says Kumar Mangalam Birla, chairman of the Aditya Birla Group “The combination of Hindalco and Novelis will establish a global integrated aluminum producer with low-cost alumina and aluminum production facilities combined with high-end aluminum rolled product capabilities. The complementary expertise of both these companies will create and provide a strong platform for sustainable growth and ongoing success.”

The transaction, which has been unanimously approved by the boards of both companies, is expected to be completed in the second quarter.

U.S. Rules Mittal Must Divest Sparrows Point
The U.S. Department of Justice will require Mittal Steel Co. N.V. to divest its Sparrows Point facility located near Baltimore, Md., to remedy the anticompetitive situation arising from Mittal’s recent $33 billion acquisition of Arcelor S.A. The Justice Department said the acquisition, as originally proposed, would have substantially lessened competition in the market for tin mill products in the eastern United States.

Following its failed attempt to divest Canadian mill Dofasco, Mittal had hoped to divest its Weirton Mill in West Virginia. A preliminary agreement to sell Weirton to Chicago-based Esmark had been reached, though that deal is now off as a result of the Justice Department decision. Esmark CEO James Bouchard is reportedly interested in purchasing Sparrows Point.

Justice officials determined that, between the two facilities, the divestiture of Sparrows Point will most reliably remedy the anticompetitive effects of the acquisition. Sparrows Point is a profitable and diversified facility that has the capacity to produce more than 500,000 tons of tin mill products annually. Sparrows Point currently operates as an integrated facility that produces the steel slabs used in the manufacture of tin mill products and, unlike the Weirton mill, would not have to develop new sources of supply for this critical input upon its separation from Mittal Steel.

“With the divestiture of Sparrows Point, competition in the market for tin mill products in the eastern U.S. will be preserved,” says Thomas O. Barnett, assistant attorney general in charge of the department’s Antitrust Division.

As a consequence of the decision, Dofasco has begun the integration process with Arcelor Mittal. “Proceeding with the integration of Dofasco and Arcelor Mittal will allow Dofasco to benefit from being part of a larger North American business and a global leader. It will improve our competitive position in North America, and put Dofasco on a stronger footing in this era of steel industry consolidation. Dofasco will be more sustainable as part of the world’s leading steel company,” says Jacques Chabanier, CEO of Dofasco, Hamilton, Ont.

Wolverine Completes Initial Phase of Recapitalization Plan
Wolverine Tube Inc., Huntsville, Ala., has closed the $50 million investment by Plainfield Special Situations Master Fund Ltd. and The Alpine Group Inc. as part of the preferred stock purchase agreement previously announced. The closing of the investment results in the issuance of 50,000 shares of preferred stock.

Concurrent with the closing of this transaction, Wolverine will reconstitute its board and reduce the size of the board from eight to seven. Also coinciding with the closing, Johann R. Manning Jr. will resign the position of president and CEO, and Harold M. Karp will join the company as its president and chief operating officer.

“We are pleased to have closed on the initial phase of Wolverine’s recapitalization program. This initial investment, along with the other portion of the company’s recapitalization, will enhance and strengthen Wolverine’s future and allow all of its shareholders the opportunity to invest in that future,” says Steven S. Elbaum, chairman and CEO of The Alpine Group, and chairman designee of Wolverine.

Extruded Metals Acquired by Mueller
Mueller Industries Inc., Memphis, Tenn., has acquired 100 percent of the stock of Extruded Metals Inc., Belding, Mich. Mueller paid $32 million plus the assumption of $10.1 million in debt to acquire the manufacturer of brass rods and alloys.

“The acquisition of Extruded should provide opportunities in our manufacturing operations to realize efficiencies including purchasing, cost reductions and productivity improvements,” says Harvey L. Karp, chairman of Mueller Industries. “These efficiencies should ensure that we remain a world-class producer of brass rod and equip us to compete effectively with worldwide manufacturers.”

Scott Brass Acquired by Sun Capital Partners
An affiliate of Sun Capital Partners Inc. has acquired Scott Brass Inc., Cranston, R.I.  Scott Brass is a fully integrated mill producing high-quality brass and copper strip with facilities in Rhode Island and Indiana.

“This transaction is a watershed event in the development and growth of Scott Brass from the stewardship of the Golden family, which founded the company in 1956, to new corporate ownership,” says Barry Golden, president and CEO of Scott Brass. “We are confident that the deep operating experience in metals fabrication and production of Sun Capital and its affiliates will be instrumental in supporting our management team in strengthening Scott Brass’ value proposition.”

Restructured Stelco Back on Track
After Closings, Fourth-Quarter Loss
Stelco Inc. has completed the major components of its operational restructuring upon exiting the Canadian bankruptcy process.

The restructuring contained three key components: productivity initiatives and reduction in labor force; reduction in production costs through workflow improvement; and optimizing capital projects. To complete the program, Stelco closed certain production facilities during the fourth quarter of 2006, which coupled with softening demand resulted in net losses of between $120 million and $140 million for the quarter.

During the shutdown, Stelco completed the reline and upgrade of the blast furnace at its Hamilton plant and finished the second phase of the expansion of the Lake Erie hot-strip mill.

Stelco does not anticipate any significant outages for the remainder of 2007.

“With these steps of our operational restructuring program now complete, we have significantly enhanced our efficiency, reduced operating costs, and are poised to compete effectively in this improving economic environment,” says Rodney Mott, president and CEO.

AK Steel Reaches Tentative Labor Pact at Middletown
AK Steel Corp., Middletown, Ohio, and the International Association of Machinists and Aerospace Workers have reached a tentative agreement on a new labor contract almost one year to the day after workers were locked out. The agreement, which would cover 1,750 hourly employees at the company’s Middletown Works, must be ratified by the union.

The new agreement would be effective March 15 and run through Sept. 15, 2011.

The company also reached a new labor agreement with United Auto­ workers members at its Coshocton (Ohio) Works plant. The three-year agreement covers about 380 workers.

While the union employees may be returning to Middletown, the company’s executives will soon be leaving. AK announced plans to move its corporate headquarters from Middletown to a new, 136,000-square-foot, technology-ready facility in West Chester, Ohio, a Cincinnati suburb. 

The company will relocate about 300 corporate office positions currently housed at its Middletown site, though 525 managerial and support personnel associated with Middletown Works will remain at its former location.

“Our new corporate headquarters will provide AK Steel with state-of-the-art technology, including advanced computing and communications capabilities that are necessary to improve our competitiveness,” says James L. Wainscott, chairman, president and CEO.  “Additionally, the move will assist us in attracting and retaining top professionals, who desire proximity to the abundant amenities and services available in the West Chester and northern Cincinnati area.”

IPSCO Reports Record Sales, Earnings
IPSCO Inc., Lisle, Ill., announced record net income in 2006 of $643.1 million, up 9.8 percent compared to $585.8 million in 2005. Company officials attribute the increased earnings to record sales volumes and higher average selling prices, partially offset by higher costs of production and administration.

IPSCO’s sales increased 24 percent in 2006 to $3.78 billion compared to $3.03 billion in 2005. Shipment volumes increased 18 percent to nearly 4.1 million tons, while the average selling price per ton increased 6 percent. Record energy tubular shipments and strong large-diameter pipe shipments totaled 1.1 million tons, an increase of 25 percent over the prior year. About 1.4 million tons, or 33 percent of IPSCO’s total shipments in 2006, were tubular products compared to 1.1 million tons in the prior year. Steel mill product shipments increased 16 percent to 2.7 million tons.

“We are pleased to report IPSCO’s fifth consecutive year of record sales and production levels. Our challenge in 2006 was to improve on the record financial results achieved in 2005. Our employees and facilities responded with another record-setting performance where we were able to increase earnings per share by 12 percent over our previous record,” said David Sutherland, president and chief executive officer. “Our 2006 financial results were very strong, and we are excited to enter 2007 with a broader, higher-value-added product mix and additional energy tubular production capacity resulting from our acquisition of NS Group [in December].”

IPSCO’s fourth-quarter net income was $139.0 million compared to $170.2 million for the same period last year and $197.1 million in the third quarter of 2006. Sales for the quarter were $982.3 million, an increase of 15 percent or $130.0 million over the same quarter last year and 1 percent or $14.6 million less than the prior quarter.

Total fourth-quarter shipments were 1.0 million tons, an increase of 7 percent compared to last year and 2 percent lower than the prior quarter. Energy tubular shipments increased 4 percent and 5 percent, respectively, over last year and the prior quarter. IPSCO’s average fourth-quarter product price was $963 per ton, up 8 percent from a year ago and up 1 percent from the prior quarter.

During the fourth quarter, IPSCO elected to reduce output volumes to accommodate the inventory reduction in plate and tubular markets. “While this had a negative impact on results for the quarter, we believe that this approach will better position us to deliver improved financial performance in the future,” Sutherland said.

End-use market demand for IPSCO’s diverse product offering remains strong for both steel and tubular products, Sutherland said. Distributor inventory reductions in both product groups are expected to continue through the first quarter of 2007.

“We are taking a two-week planned outage at Mobile (Ala.) in March for normal maintenance and the installation of capital improvements. We will also adjust production further as required across our facilities to accommodate order levels from our distributors and focus on end-user sales, increased value-added product mix and maintaining our market share,” he added.

Arcelor Mittal Strategy On Track
The integration of Mittal Steel with all of its recent acquisitions is progressing well, reported Lakshmi N. Mittal, president and CEO, during last month’s fourth-quarter conference call.

“I am pleased to report a strong performance in 2006 for Arcelor Mittal, with strong cash flow from operations and EBITDA in line with guidance. This strong set of pro forma numbers clearly demonstrates the benefits of the merger between Arcelor and Mittal Steel.”

Mittal Steel Company N.V., the world’s largest and most global steel company, produced 118 million metric tons of steel in 2006. Its 2006 EBITDA of $15.3 billion was a threefold improvement over 2005’s $4.3 billion.

“We are continuing to execute our strategy and further build on our market- leading position, as seen by our recent acquisitions and expansion plans both in steel and mining,” Mittal said. “Looking forward, the market is stable and we are anticipating performance for first-quarter 2007 to be in line with fourth-quarter 2006 levels.”

Indiana Ports Handle Record Cargo in 2006
The Ports of Indiana handled a record $1.89 billion of cargo in 2006. The total was a 23 percent increase over the 2005 record.

Steel accounted for $955 million of the 2006 shipments, a 45 increase from 2005.  

All three of Indiana’s ports set individual records for shipments in 2006. On the Ohio River, Mount Vernon totaled $482 million, up 20 percent, while Jeffersonville was at $588 million, a 30 percent increase. Shipments at Burns Harbor/Portage on Lake Michigan totaled $820 million, a 21 percent increase.

Indiana’s three ports shipped 8.6 million tons of cargo, which was a 12 percent increase from 2005 and more than every other year since 1994. Top cargoes by volume were grain, coal, steel, fertilizer, limestone, salt, asphalt, coke, cement, minerals and asphalt oil.

In 2006, the Port of Indiana-Burns Harbor/Portage set a new record for steel shipments, which were up 57 percent from 2005. Sharing boundaries with two of the largest steel mills in the country, this port handles a wide range of steel-related cargoes including about 15 percent of all U.S. steel trade with Europe .

“Steel shipments were up this year largely because the strong U.S. demand for steel was far greater than the domestic supply,” says Steve Mosher, port director at the Burns Harbor facility. “It also helped that Great Lakes shipping rates were very reasonable and international steel prices remained competitive.”

Esmark, NLMK, Duferco Venture Bids to Acquire Winner Steel
Chicago-based Esmark Inc. and Duferco U.S. Investment Corp. have formed a consortium to purchase the assets of Pennsylvania’s Winner Steel. Currently, the consortium has entered into a letter of intent with Winner Steel, which is subject to negotiation and execution of a definitive asset purchase agreement, expected to be completed in the second quarter of 2007

Duferco U.S. Investment Corp. is a wholly-owned subsidiary of Steel Invest & Finance S.A. of Luxembourg, a 50/50 joint venture between Duferco Group and Novolipetsk (NLMK) Steel. Winner Steel is one of the largest independent galvanized steel producers in the United States, operating three galvanizing lines with combined annual capacity of 1.2 million metric ton.

Winner Steel is located close to the Farrell facility, which is already part of the NLMK-Duferco joint venture, and is one of the primary suppliers of cold-rolled steel to the galvanizing industry, including Winner.

CMC Subsidiary Bids
on Croatian Pipe Mill
A subsidiary of Commercial Metals Co., Irving, Texas, has submitted a bid to acquire Valjaonica Cijevi Sisak from the Croatian Privatization Fund. The bid was made through the company’s Swiss subsidiary, Commercial Metals AG.

Commercial Metals is one of two bidders for the proposed privatization of the electric furnace steel pipe mill. The facility has 70,000 tons of melting capacity and 300,000 tons of tubular manufacturing capacity on its existing product line, which includes seamless, welded and cold processed pipe.

“We are very excited about the prospects for Sisak and look forward to promptly commencing discussions with the Fund to conclude a purchase contract,” says Hanns Zoellner, president of CMC’s marketing and distribution segment. “With the experience and success we have enjoyed following the acquisition of a majority interest in CMC Zawiercie, our Polish mill, we are confident we can achieve the same results in Croatia.”

BRIEFS
Luvata, based in Middlesex, U.K., has announced plans for a new facility in Monterrey, Mexico, that will increase tube capacity by 50,000 tons per year. The new $40 million facility is expected to begin production in early 2008. Luvata’s Heat Transfer Division is a major supplier of tube and completed coil units in copper and aluminum for the HVAC industries. 

Carpenter Technology Corp., Wyomissing, Pa., and QuesTek Innovations LLC have entered into a license agreement whereby Carpenter will produce and market QuesTek’s Ferrium S53 ultra-high-strength corrosion-resistant stainless alloy. The material will be used in U.S. Air Force aircraft landing gear. Ferrium S53 is an alternative to 300M and other high-strength alloys that have been used in landing gear components when there is desire for environmental and performance reasons to eliminate cadmium coatings. 

Outokumpu Stainless has opened a wholly owned, dedicated stainless steel sales office in Istanbul, Turkey. The new office, headed by Ugur Arpaci, was opened to take advantage of Turkey’s growing economy and geographic position.

Algoma Steel Inc., Sault Ste. Marie, Ontario, has been approached by a third party regarding the possible acquisition of the company. The company would not reveal any additional details about the discussions. Algoma is an integrated steel producer focusing on the manufacture and sale of rolled steel products, including hot- and cold-rolled sheet and plate.

MACSTEEL Atmosphere An­ neal­ ing, a subsidiary of Quanex Corp., Houston, has acquired the assets of Atmosphere Annealing Inc., a wholly owned subsidiary of Maxco Inc. AAI is a metal heat-treating company with four plants in the Midwest and 2006 sales of $46.6 million.

Century Aluminum Co., Mon­ terey, Calif., has signed a memorandum of understanding with the Republic of Congo for the exclusive right to develop an aluminum business there, including a smelter, alumina refinery and a bauxite mine. The parties have identified Pointe Noire as a potential site for the smelter and refinery.

China’s Wuhan Iron & Steel Group Co. Ltd., has contracted with Siemens Industrial Solutions and Services Group to purchase the mechanical and electrical equipment for a new plate mill. Production of the first plate is scheduled for August 2008.

Arcelor Mittal has signed a joint venture agreement with the Bin Jarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia. The mill will be located in Jubail Industrial City, and will have a capacity of 500,000 tons per year, with about two-thirds of its capacity used in the oil industry and the remainder for line pipe.

WCI Steel Inc., Warren, Ohio, has entered into a long-term supply agreement with Sun Coke Co. to provide a source of domestic coke. The 15-year contract, which starts in 2008, assures WCI Steel of approximately 40 percent of its coke supply requirements for its blast furnace operations.

Greer Steel, Dover, Ohio, has upgraded the motor on its 30-inch mill. With its new mill motor, Greer has boosted horsepower from 1,000 to 1,200 hp, allowing the company to take larger reductions per pass or run at increased speeds with the same reduction levels.

Indalex Aluminum Solutions has awarded Granco Clark an order for a hot-jet aluminum log heating furnace and HBCS hot-log saw for the company’s Elkhart, Ind., facility.

Allied Tube & Conduit, Harvey, Ill., a manufacturer of electrical and metal products, has formed a construction division within the company. ACD was formed to serve the commercial construction market.

Allegheny Technologies Inc., Pittsburgh, has reached tentative four-year agreements with 3,000 United Steelworkers employees at its ATI Allegheny Ludlum and ATI’s Albany, Ore., titanium operations.

Alcoa Intalco Works aluminum smelter in Ferndale, Wash., produced its first molten metal from a re-energized potline that will increase production at the site by 7,500 tons per month. When the restart is complete, the smelter will be operating at two-thirds capacity and producing approximately 180,000 tons of aluminum yearly.

Russia’s Federal Antimonopoly Service granted clearance to Rusal,
SUAL and Glencore to create United Company Rusal. Antimonopoly authorities in the European Com­ mission, Ukraine, Montenegro and Turkey have already granted clearance.

Arcelor Mittal has launched Arcelor Mittal TV, a web site documenting the merger of the two steel companies. The site, www.arcelormittaltv.com, features bi-weekly episodes outlining the integration and merger processes.

Trumpf, Farmington, Conn., has named Chaparral Machinery its new machine and tool distributor for northern Texas and New Mexico. 

Dofasco Tubular Products announced that its Shelby, Ohio, plant has been awarded certification for its compliance with the TS 16949 Quality Management System. The plant already holds a QS-9000 certification.

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.

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.

PEOPLE
Wayne R. Hale will succeed the retiring Jack Gates as executive vice president and chief operating officer at Century Aluminum, Monterey, Calif. Hale had been senior vice president-upstream for Sual-Holding in Moscow, Russia.

Stephen A. Szymanski has been named general manager-business development and John A. Rose has been named general manager-ERP Project by United States Steel Corp. Szymanski succeeds James D. Lawrence, who retired at the end of January. The company also appointed Christopher Masciantonio general manager-state government affairs.

Timothy G. Rupert will step down as president and chief executive officer at RTI International Metals Inc., Niles, Ohio, effective with the company’s annual meeting in April and retire at the end of July. At the April meeting, the company will name Dawne S. Hickton vice chairman and CEO; Michael C. Wellham president and chief operating officer; Steve Griangiordano executive vice president; and William Hull senior vice president and chief financial officer.

Don B. Daily, president of Gallatin Steel, was presented the 2007 Achievement in Safety Award from the Steel Manufacturers Association during the minimill steel industry trade group’s annual board meeting.

OBITUARY
Clifford Borland, the founder of Newport Steel, died Feb. 18 at the age of 69. He retired as CEO of Newport Steel in 1999, but remained as chairman of NS Group until 2004. He led an employee purchase of the shuttered Interlake Steel Mill. Newport Steel became one of North America’s leading tubular businesses. It was purchased by IPSCO in 2006.