Industry Calls for Global Approach
to Combating Climate Change
Steel executives from leading world companies endorsed a global approach as the best way for the industry to help address climate change. At the recent annual meeting of the International Iron and Steel Institute in Berlin, the board of directors approved the next stage in the establishment of a Global Sectoral Approach for steel.

The approach involves the collection and reporting of carbon dioxide emissions data by steel plants in all the major steel producing countries. Establishment of the data on a common and consistent basis is the starting point for the setting of commitments post-2012 on a national or regional basis, said board members.

Through major advancements in technology, the steel industry in North America, Western Europe and Japan has reduced energy consumption per unit of production by 49 percent in the last 25 years. However, at the same time, there has been a dramatic expansion in global steel production. The steel industry now accounts for only 3 to 4 percent of global man-made greenhouse gas emissions. Over 90 percent of steel industry emissions come from iron production in nine countries or regions: Brazil, China, EU-27, India, Japan, Korea, Russia, Ukraine and the U.S., reports IISI.

“Cap and trade regional policies such as those currently used in the EU are not effective in reducing carbon dioxide emissions. Constraining production from the best emission performing plants is not the solution for a globally competitive industry such as steel. An effective approach for the steel industry requires the participation of all major steel producing countries and a focus on improving emissions per unit of production,” says Philippe Varin, IISI Executive Committee member and CEO of Corus.

The IISI board declared its commitment to seven key actions:

• Expanding the use of current efficient technologies widely used in modern steelmaking sites, to minimize the generation of carbon dioxide.
• Undertaking research and development for new technologies to radically reduce the level of CO2 emissions into the atmosphere for each ton of steel produced.
• Continuing to optimize and maximize the recycling of steel scrap.
• Maximizing the value of steel industry by-products.
• Facilitating the use of the new generation of steels to improve the energy efficiency of steel-using products in partnership with customers.
• Adopting common and verified reporting procedures that account for and report progress towards achieving CO2 emission reductions.
• Adopting a global sector-specific approach.
• Additionally, the group called for government support in the following areas:
• Replace cap and trade emission regimes with policies that allow the most efficient steel companies in terms of CO2 emissions to expand and the least efficient to decline.
• Encourage the closure and replacement of the least efficient steelmaking plants.
• Engage with industry to adopt a Sector Specific framework, involving all major steel producing countries, that includes reporting procedures to track progress towards achieving CO2 emission reductions.
• Support long-term research for new technology solutions proposed by the steel industry.
• Establish programs that encourage steel recycling.

AK Investing $180 Million to Upgrade Specialty Mills

AK Steel has approved capital investments to lower costs and increase capacity at its specialty steel operations in Butler, Pa., and Zanesville, Ohio. The projects, which will total $180 million, will include a new electric arc furnace and ladle metallurgy furnace, plus additional electrical steel finishing equipment.

The projects will help AK Steel meet growing electrical steel demand, as well as increase carbon steel production at its Butler Works. The company expects to complete the projects by the end of 2009.

“Our grain-oriented electrical steels continue to be in high demand and short supply,” says James L. Wainscott, chairman and CEO of AK Steel. “The capital investments will help serve the robust markets for new, highly efficient electrical transformers in the United States and elsewhere around the world.”

When the electrical steel projects have been completed, AK Steel’s grain-oriented electrical steel capacity will increase to approximately 344,000 tons annually. The new capital equipment will allow AK to increase production of its highest efficiency product, as well as increase its coating capacity for all grades of grain-oriented electrical steels.

Currently, AK operates three EAFs in Butler.  The capital investment will replace two of the existing EAFs with a single furnace capable of melting more than 1.45 million tons annually, about 40 percent more than is currently produced with a three-furnace operation.  If warranted by market conditions, that additional capacity could be used to produce approximately 400,000 tons of carbon steel slabs annually, thus improving the company’s self-sufficiency by substantially reducing its need to purchase merchant slabs, AK claims.

One of the existing EAFs will be preserved to provide additional manufacturing flexibility.  The addition of a ladle metallurgy furnace will help improve the quality and productivity of all of Butler’s melt capacity by allowing additional chemistry and temperature refinements prior to continuous casting.

Olin Corp. Acquired by KPS Capital Partners

KPS Capital Partners LP has agreed to acquire the worldwide metals business of Olin Corp. through the newly formed company Global Brass and Copper Holdings Inc. The deal, which is expected to close this quarter, was valued at $400 million.

The metals business, which generated revenues of $2.1 billion in 2006, includes all of Olin Corp.’s active metals operations, comprised of manufacturing facilities in East Alton, Ill.; Montpelier and Bryan, Ohio; Waterbury, Conn.; and Cuba, Mo.; joint ventures in Japan and China; as well as the A.J. Oster metals service center business.

Global Brass and Copper Holdings Inc. and its subsidiaries will sell products under the Olin Metals, Olin Brass and Chase Brass brand names.

Thyssen Orders Equipment for New Alabama Mill

ThyssenKrupp Steel AG has ordered a hot-strip mill and cold-rolling complex from SMS Demag AG for use at its planned facility in Mount Vernon, Ala.

The hot-strip mill covers the entire production range for all grades from carbon to stainless steel, and is designed for an annual production of 5.4 million metric tons. The cold-rolling complex consists of a coupled pickling/tandem mill capable of producing 2.5 million metric tons of cold strip per year, plus a continuous pickling line and a skin-passing mill.

Construction of the mill in Alabama will start in early 2008, and completion is scheduled for March 2010.

Carpenter, TIMET Enter Titanium Supply Agreement

Carpenter Technology Corp., Wyomissing, Pa., and Dallas-based Titanium Metals Corp. have entered a joint agreement under which Carpenter will provide specialized titanium conversion processing to TIMET and TIMET will supply Carpenter with titanium and scrap melting services.

Under terms of the processing agreement, Carpenter will provide TIMET with forging and related processing services at agreed upon prices for TIMET’s titanium products for a minimum of 12 years and a maximum of 20 years.

Under the supply agreement covering the same period, TIMET will supply Carpenter with titanium metal and toll melting services for Carpenter’s titanium scrap at agreed upon prices. Financial terms of the two agreements were not disclosed.

“Together, these agreements help to utilize capacity and increase the operating efficiency of Carpenter’s processing operations in Reading, Pa., and represent a long-term source of titanium for our Dynamet subsidiary. The agreements leverage the capabilities of Carpenter and TIMET and set an example of the productive collaborations Carpenter will pursue as part of its strategic growth plan,” says Anne L. Stevens, chairman and CEO of Carpenter.

New ARCCO Steel Cleaning Facility to Open in May 2008

The American Roll Coating and Cleaning Company LLC, a new steel cleaning facility, is being built in Erie, Mich. The 32,000-square-foot facility is expected to become operational in May 2008.

ARCCO will utilize a steel cleaning process that incorporates a high-pressure wash technique with brushes. This service will be marketed to steel service centers, distributors and insurance companies that have steel coils requiring surface cleaning. Additionally, the line will have the capability of applying a dry-film lubrication or other coatings to enhance customers’ manufacturing processes.

ARCCO will also specialize in value-added processes for new or distressed coil steel that include: A four-stage wash unit, roll coater, edge trimming, oil/rust removal, electrostatic oiler and shape correction leveler.

The facility has a projected annual capacity of 200,000 tons, and will handle cold-rolled, hot-rolled pickled and oiled, galvanized, galvannealed, aluminized, aluminum and stainless steel in thicknesses from 0.028 inches to 0.140 inches and widths up to 72 inches. It can process 60,000-pound coils.

ARCCO is a partnership between John Bates of Heidtman Steel and Bill Feniger of Universal Metals. Mike Leonard will serve as president and general manager.

ThyssenKrupp Opening Illinois Logistics Center

ThyssenKrupp Industrial Services NA, a business unit of ThyssenKrupp Materials NA Inc., plans to open a new logistics center in Danville, Ill. The new 92,000-square-foot facility is adjacent to the manufacturing operations of ThyssenKrupp Presta Danville LLC and Systrand Presta Engine Systems LLC.

ThyssenKrupp Industrial Services NA will provide a broad range of supply chain management services. The inventory management and internal and external logistics services will include the coordination of raw material flow from suppliers, tube cutting, sequencing, just-in-time delivery to the production line and dunnage management.

Additionally, a special line of storage and packaging services will be provided to the ThyssenKrupp Crankshaft Co. LLC group, which also has production and distribution operations in Danville.

“The opening of the new logistics center in Danville marks an important step in our expansion as a service provider to the automotive components market in the United States and Canada,” says Malcolm Gill, president of ThyssenKrupp Industrial Services NA. “Our expertise in warehousing, logistics, material handling and supply chain management puts us in the most qualified position to meet the inventory management needs of ThyssenKrupp Presta, Systrand Presta, and ThyssenKrupp Crankshaft.”

ArcelorMittal, Borusan Building Hot-Strip Mill

ArcelorMittal, Luxembourg, and Borusan, one of Turkey’s leading steel producers, have entered a 50/50 joint venture partnership to construct a new hot-strip mill, at a cost of $500 million.

The mill will be located in Turkey next to ArcelorMittal and Borusan’s jointly operated Borçelik plant in Gemlik, on the Marmara Sea coast. It is expected to come online in first-half 2010 with a capacity of 4.8 million tons. 

“The Turkish steel market is strong and is expected to grow at a yearly rate of at least 6 percent over the next 10 years,” says Michel Wurth, member of ArcelorMittal’s Group Management Board in charge of Flat Carbon Europe. “We are very excited at the prospect of expanding our cooperation with our partner Borusan into the hot-rolled coil business.”

ArcelorMittal also has acquired a 90 percent stake in Rongcheng Chengshan Steelcord, the privately owned Chinese steelcord wire drawing company based in Shandong province. The acquisition is valued at $26 million.      

Briefs

UC Rusal has signed an agreement with the government of Russia’s Saratov region for the construction of a major energy and metals complex. The complex will include a significant expansion of the Balakovsky nuclear power plant and the construction of the world’s largest aluminum smelter, with an annual production capacity of 1.05 million tons.

Montreal-based Alcan has joined the Rio Tinto group following the successful offer for Alcan by a subsidiary of Rio Tinto. The expanded aluminum product group, formed by the combination of Alcan and Rio Tinto’s existing aluminum assets, will be known as Rio Tinto Alcan.

Alcoa, Pittsburgh, Pa., has decided to sell its packaging and consumer business after a strategic review of the company. Alcoa is also close to selling its automotive castings business, and plans to restructure its electrical and electronics solutions business in the Americas and Europe.

Outokumpu Stainless, Schaumburg, Ill., has changed the calculation method for the alloy surcharge in its stainless steel pricing. Currently, the alloy surcharge is based on the average raw material prices two and three months prior to delivery. Starting with stainless steel deliveries for January 2008, Outokumpu’s alloy surcharge will be based on the 30-day average price of raw materials calculated back from the previous month’s 20th day. In the new method, only the reference period will change, and all other parameters will remain the same. Outokumpu will apply the new surcharge calculation method in its home markets as well as in markets where there are no local producers.

Red Bud Industries, Red Bud, Ill., plans to expand its manufacturing facility to meet demand for its coil processing equipment. Red Bud will double its facility to more than 200,000 square feet. The plans also call for installation of two new Mazak machining centers with pallet server systems, plus a Kasto automated material storage and retrieval system.

Trumpf Inc., Farmington, Conn., has acquired 100 percent of Canadian company Advanced Fabricating Machinery. AFM was formed in 1997 by Trumpf and Robert Watson as an equal joint venture. 

Workers at PTC Alliance Corp. ended a 14-day strike at the company’s Alliance, Ohio, facility and returned to work under the previous contract. United Steelworkers and the tubing company are continuing to work on a new agreement.

KASTO-Racine, which sells metal saws and automated storage systems, has changed its name to KASTO Inc. “We’ve changed our name, but not who we are. Our dedication to product quality and customer satisfaction remains the same,” says Werner Rankenhohn, president of the newly renamed KASTO Inc.

The Timken Company, Canton, Ohio, has announced increased base prices on hot-rolled, cold-finished and single-thermal-treated special bar quality products by $30 per ton, effective with shipments beginning Dec. 1. Raw material surcharges will remain in effect.

People

John Thuestad has been appointed president of global primary products for Alcoa, Pittsburgh, Pa., charged with accountability for the company’s 10 aluminum smelters in the U.S. and alumina refinery in Pt. Comfort, Texas. Thuestad had been president of Elkem AS of Norway.

Sanjay Guglani has been appointed vice president and chief marketing officer of Carpenter Technology Corp., Wyomissing, Pa. The new position will focus on expanding Carpenter’s sales and business operations.

Indalex Holding Corp., Lincolnshire, Ill. has appointed Patrick Lawlor as vice president and chief financial officer. Lawler had been vice president and general manager, Midwest division, for Norsk Hydro.