Evraz, TMK Acquire IPSCO’s
Tubulars Business from SSAB
Russian steel company Evraz will continue its expansion in North America with the acquisition of IPSCO Tubulars from Sweden’s SSAB. Evraz will then sell a portion of the new acquisition to fellow Russian steelmaker TMK.

Evraz will acquire IPSCO Tubulars from SSAB for $4.025 billion. Evraz also has an agreement to sell IPSCO’s U.S. tubular and seamless business to TMK for approximately $1.7 billion, while holding onto IPSCO’s Canadian plate and pipe business.

The agreement between SSAB and Evraz involves the sale of 12 tubular locations, including the Regina and Koppel steel mills that directly supply the tubular operations, the Regina coil processing facility and related scrap facilities. IPSCO Tubulars has approximately 3,250 employees.

“Following the successful acquisition of Oregon Steel Mills, this transaction will further enhance Evraz’s existing North American presence in high value-added steel segments. This deal will increase our exposure to the attractive energy and infrastructure sectors throughout the region,” says Alexander Frolov, Evraz’s chairman and CEO.

IPSCO Tubulars was acquired as part of SSAB’s acquisition of IPSCO in 2007 and had sales of $2.4 billion in 2007. 

SSAB will retain the majority of the steel production capacity it acquired as part of its acquisition of IPSCO, including steel mills located in Mobile, Ala., and Montpelier, Iowa, together with four cut-to-length facilities. These facilities have an annual capacity of approximately 2.5 million tons of crude steel production. 

The IPSCO brand is closely associated with the tubular business and is included in the transaction. The retained steel operations will operate as a division within SSAB. SSAB also will retain the right to use the IPSCO brand during a transition period.

“This transaction allows us to focus on our core business—to be a global leader within our high- strength-steel niches. We can further grow and develop our steel operations and expand into new markets. IPSCO Tubulars will get an owner with an interest and focus in the tubular business,” says Olof Faxander, president and CEO of SSAB.

Additionally, TMK will acquire 100 percent of IPSCO Tubulars Inc. and 51 percent of NS Group Inc. TMK and Evraz have also entered into an option for TMK to acquire the remaining 49 percent of NS Group in 2009.

“The acquisition of IPSCO Tubular’s U.S. assets is the latest step in the execution of TMK’s strategic emphasis on further bolstering our offering in the oil and gas sectors, while expanding our geographic footprint,” says Konstantin Semerikov, TMK’s CEO. “The transaction marks the entry of TMK, one of the world’s largest steel pipe and tube makers, into the North American market, the world’s biggest market for OCTG and line pipe. The transaction also broadens TMK’s product mix with a significant position in higher value-added products.”

DiMicco: Steel Market
Strong Despite Recession
Nucor’s Dan DiMicco was pessimistic about the U.S. economy but optimistic about the steel industry’s role in it during his keynote address at the SBB Steel Markets North America 2008 Conference in Chicago last month.

“It’s no longer a slowdown,” DiMicco said in early March. “We are in a recession, pure and simple. And what will happen if the other shoe falls and we go from the recession we’re in to a severe recession?”

Despite this dire possibility, the outlook is bright for the steel industry, where material is tight. “The first half of the year is going to be very good for the steel business. Despite the fact that the demand level is here,” he said, holding his right hand low, “supply is here,” he added, holding his left hand even lower. “When supply and demand are in balance, you have a healthy environment.”

DiMicco credits service centers for maintaining appropriate stock levels. “One of the things influencing the service center industry is a new model—a strict control of inventory by maintaining strong relationships with the domestic mills. For lack of a better name, I’ll call it the Reliance method,” DiMicco said. “In this environment, with steel prices as high as they are, with the credit situation the way it is, holding a lot of inventory is not a good idea.”

Though not looking to compete with service centers like Reliance, DiMicco addressed his company’s plans to construct a processing center in Mexico.

“We sell a lot of steel down there, probably a half-million tons. We decided to get into the processing business down there. We thought it was a good way for us to get into Mexico to service our customers and channel our steel. It will also provide a platform for future growth.”

DiMicco added that the Mexican facility will “principally process our own steel, though we’d be open to processing steel of any suppliers.”

Severstal Agrees to Buy Sparrows Point
ArcelorMittal has finally found a steel company to take Sparrows Point off its hands. Russian steelmaker OAO Severstal will acquire the Maryland-based tin mill for $810 million.

The sale of Sparrows Point was mandated by the U.S. Department of Justice for antitrust reasons due to the merger of Arcelor and Mittal. ArcelorMittal initially agreed to sell the Maryland facility to a joint venture led by Esmark, though that deal fell through.

Sparrows Point has a capacity of 3.6 million metric tons of crude steel and shipped 2.3 million metric tons of finished steel products in 2007. It is the only integrated producer of flat-rolled steel on the U.S. East Coast and is a major North American supplier of tin-mill products.

“With Sparrows Point, Severstal brings into its U.S. portfolio an asset with significant existing value as well as unlocked growth potential,” says Alexei Mordashov, CEO of Severstal. “This acquisition presents us with an opportunity to enhance productivity at Sparrows Point through our high standards of operational performance and will benefit our existing U.S. businesses.”

Severstal expects substantial synergies with its current U.S. operations in Dearborn, Mich., and Columbus, Miss. With the addition of Sparrows Point, Severstal will also improve its distribution channels and increase its geographic reach as the plant provides direct ocean access and proximity to a number of major U.S. railways and highways, say company officials.

“We remain committed to growth in North America and believe in the long-term promise of the U.S. market. We’re confident that this acquisition will create value for our shareholders while strengthening our U.S. platform as a whole,” Mordashov says.

The United Steelworkers have already given union approval to the acquisition.

“In the search for a buyer, following the unraveling of a previous proposed deal last December, we have always maintained that the union will not reach agreement with a successor unless it includes a long-term business and operational strategy that produces security for our members, their families and our retirees,” says David McCall, chair of the USW bargaining committee for ArcelorMittal in North America. “We now have that at Severstal.”

ArcelorMittal agreed in August 2007 to sell Sparrows Point to E2, a joint venture led by Esmark and including Brazil’s Vale, Industrial Union of Donbass Corp. and Franklin Templeton Investments. ArcelorMittal dissolved that agreement in December, citing E2’s failure to secure financing.

The new deal is expected to close during the second quarter.

EPA Recognizes Copper’s
Antimicrobial Properties
The U.S. Environmental Protection Agency has approved the antimicrobial properties of copper alloys, acknowledging that copper, brass and bronze are capable of killing harmful, potentially deadly bacteria. Copper is the first solid surface material to receive this type of EPA registration, which opens the door to a host of potential new applications for red metals.

The EPA registration is based on independent laboratory testing using EPA-prescribed protocols that demonstrate the metals’ ability to kill specific disease-causing bacteria, including Methicillin-resistant Staphylococcus aureus. MRSA is one of the most virulent strains of antibiotic-resistant bacteria and a common cause of hospital- and community-acquired infections.

“This is an exciting breakthrough for the copper industry as a whole,” says Warren Bartel, senior vice president and senior advisor for Luvata Group. “As a leading international metals supplier of copper components and solutions, we see ourselves playing a key role in providing our customers with the materials they will need to take advantage of the antimicrobial qualities of copper alloys.”

Testing under EPA-approved protocols demonstrates that copper, brasses and bronzes are effective against a number of disease-causing bacteria. For example, one study shows that on copper alloy surfaces, greater than 99.9 percent of MRSA “superbugs” are killed within two hours at room temperature.

“When cleaned regularly, antimicrobial copper alloy surfaces kill greater than 99.9 percent of (specific) bacteria within two hours, and continue to kill more than 99 percent of (these) bacteria even after repeated contamination,” the EPA report states. “The use of a copper alloy surface is a supplement to and not a substitute for standard infection control practices; users must continue to follow all current infection control practices, including those practices related to cleaning and disinfecting of environmental surfaces. The copper alloy surface material has been shown to reduce microbial contamination, but it does not necessarily prevent cross contamination.”

Widely publicized statistics from the Centers for Disease Control and Prevention estimate that infections acquired in U.S. hospitals affect two million individuals every year and result in nearly 100,000 deaths annually. The use of copper alloys for frequently touched surfaces, as a supplement to existing CDC-prescribed handwashing and disinfecting regimens, has far-reaching implications, the Copper Development Association believes.

Potential uses include door and furniture hardware, bed rails, intravenous stands, dispensers, faucets, sinks and work stations, which can help reduce the amount of disease-causing bacteria in patient rooms.

“When considering the cost of preventive measures or treatment for these diseases, copper may likely become the low-cost, environmentally friendly solution. Now that the EPA has granted copper official status as an antimicrobial agent, we have only scratched the surface of possible copper applications directly targeted at improving public health,” Bartel says.

Unlike coatings or other materials treatments, the antibacterial efficacy of copper metals won’t wear away; they offer long-term protection. Discussions are ongoing with major hospital equipment manufacturers about the development of appropriate copper-based products, the CDA says.

$25 Million Expansion On Track at Indalex
Indalex Inc.’s $25 million expansion of its aluminum extrusion facility at Connersville, Ind., is on track for launch late in the second quarter of this year.

A new 6000-ton UBE extrusion press, the centerpiece of the automated extrusion system being installed at the plant, is the largest in the company’s North American manufacturing network. Installation of the press is slated to begin in early April with trial operations expected later in the second quarter.

The press provides an additional 47 million pounds of production capacity for Indalex. It will produce larger profiles with a width of 20 inches and a maximum profile cut length of 60 feet to serve customers in the commercial, rail and automotive sectors of the transportation market, as well as the metal distribution market.

The new extrusion system includes a number of innovations such as mechanical assist for lifting heavy extrusions, a state-of-the-art quenching system, semi-automated packaging and automated scrap-handling processes to reduce labor cost and a die-cleaning system that eliminates human contact with caustic chemicals to improve workplace safety.

Indalex will add 20 new jobs at the Connersville facility by the end of the third quarter as a result of the expansion.

The Connersville facility has been expanded from 80,000 to 185,000 square feet to accommodate the new extrusion system.

“The expansion of the Connersville facility is the latest step in our continuing manufacturing improvement strategy. Our goals have been to add appropriate capacity to grow with our customers and to improve manufacturing productivity as a result of innovative manufacturing capability,” says Tim Stubbs, president and CEO of Indalex Holdings Finance Inc.

“The Connersville expansion adds more capacity and capability to help meet the needs of our customers in the truck trailer, rail car and metal distribution industries now and for the longer-term. We are well-placed to grow our strong position in these key market segments,” he adds.

Indalex has invested more than $200 million in its North America-wide manufacturing network in the last 10 years including major expansions at its facilities in Georgia, Indiana, North Carolina and Pennsylvania in the U.S., as well as in British Columbia, Ontario and Quebec in Canada.

Nucor Acquires Two More Recyclers
Nucor Corp., Charlotte, N.C., has completed two more ventures upstream with the acquisition of Metal Recycling Services, Monroe, N.C., and Galamba Metals Group, Kansas City, Mo.

MRS operates a full-service processing facility, processing 220,000 tons of scrap annually. The MRS deal follows the earlier acquisition of David J. Joseph Co., one of the nation’s largest scrap companies. 

“The addition of MRS demonstrates our commitment to grow in the scrap sector by using DJJ as a platform for that growth,” says Daniel R. DiMicco, Nucor’s chairman, CEO and president. 

Additionally, through its DJJ subsidiary, Nucor has completed the acquisition of Galamba Metals Group. Galamba, founded in 1977, operates 16 full-service scrap processing facilities in Kansas, Missouri and Arkansas (including two automobile shredders), and processes over 500,000 tons annually.

DJJ will operate the Galamba Metals Group facilities under the Advantage Metals Recycling LLC name. Galamba’s current employees and management team will remain with Advantage Metals Recycling.

Aleris Revenues Increase,
But Earnings Decline in Tough 2007
Aluminum producer Aleris, Beachwood, Ohio, reported 2007 revenues of $6.0 billion and a loss from continuing operations of $94.1 million during its recent year-end conference call with analysts and investors. In 2006, Aleris reported revenues of $4.2 billion and income from continuing operations of $30.8 million.

“Fourth quarter performance was significantly impacted by reduced volumes in our Global Rolled and Extruded Products business,” said Steven J. Demetriou, chairman and CEO. “The U.S. construction and automotive industries continued to weaken and demand in certain European end uses was impacted by customer inventory destocking.”

Aleris has already announced actions to offset reduced demand in North America, including the closure of the company’s Bedford, Ohio, and Toronto paint facilities, and the temporary reduction of manufacturing at its Richmond, Va., rolling mill.

“2007 proved to be a challenging year with soft demand in North America and higher than expected costs in Europe,” Demetriou said. “We will continue to relentlessly drive our productivity and integration programs and to right-size our cost base with initiatives across the company. We began restructuring initiatives in our European operations and made significant progress in integrating the recently acquired Wabash Alloys operations.”

Additionally, the company announced the combination of the North American specification alloy and aluminum recycling operations under a single management team, and announced plans to reduce the size of its North American rolled products manufacturing base.

“These actions and other restructuring initiatives under way will allow us to consolidate nine facilities and eliminate approximately 700 positions across Aleris and shed over $60 million in cost between 2008 and 2009,” Demetriou said.

Esmark Selling Interest
in Venture with Nisshin
Esmark Inc., Wheeling, Pa., has agreed to sell its minority equity interest in Wheeling-Nisshin Inc., a joint venture with Nisshin Steel Co. Ltd. Under the agreement, Esmark will sell its 35.7 percent interest for $71.4 million to Nisshin Holding Inc., which currently owns the remaining 64.3 percent equity interest position. “As detailed in my Nov. 6, 2007, letter to our shareholders, today’s actions represent one of the first phases of our plan to make Esmark profitable. The minority interest in Wheeling-Nisshin was not strategic to our core businesses, and the reduction of debt will improve our ability to operate the company and achieve our cost-reduction goals,” says James Bouchard, chairman and CEO of Esmark.

Esmark will use the net proceeds from the deal to reduce long-term debt.

“As we have committed, we will continue to evaluate all of our operations and take actions to discontinue non-competitive product offerings and equipment, improve our operations, as well as evaluate and pursue when appropriate strategic options, all in an effort to enhance our company and position it for sustained, long-term growth,” Bouchard says.

Alcoa Combines Transportation Units
Alcoa, Pittsburgh, has combined its wheel products business with its auto and truck structures business to form a new business unit, called Wheel and Transportation Products. The change was made to capture adjacent growth opportunities and strengthen Alcoa’s overall ground transportation portfolio, the company says.

Kevin B. Kramer, 48, who had been president of wheel products, will become president of wheel and transportation products.

The new business unit, headquartered in Cleveland, will serve the commercial vehicle, automotive and defense markets with products used in a range of applications including forged aluminum wheels, aluminum space frames, specialized vacuum die-cast products, niche products such as Dura-Bright and Dura-Flange wheels and M-Series medium truck wheels, as well as a variety of other aluminum components for these markets.

AK Steel Signs Coke, Energy Contract
AK Steel, West Chester, Pa., has approved a 20-year-supply contract with SunCoke Energy Inc. SunCoke will provide AK Steel with metallurgical-grade coke and electrical power, to come from a new facility to be constructed adjacent to AK Steel’s Middletown (Ohio) Works.

The agreement is contingent upon, among other conditions, SunCoke receiving all necessary local, state and federal approvals and permits, as well as available economic incentives to build and operate the proposed new facility.

The proposed facility is an environmentally friendly, heat-recovery coke battery capable of producing about 550,000 tons of coke, and 50 megawatts of electrical power annually. AK Steel operates coke batteries in Middletown, Ohio, and Ashland, Ky., but must purchase about 25 percent of its annual coke requirements on the open market.

Under the agreement, AK Steel will purchase all of the coke and electrical power generated from the new plant for at least 20 years, helping AK Steel achieve its goal of more fully integrating its raw material supply. AK Steel said it has no plans to idle any of its existing cokemaking capacity if the proposed SunCoke project is consummated.

“This agreement represents an environmentally sound, long-term commitment to Middletown Works’ primary operations,” says James L. Wainscott, chairman, president and CEO of AK Steel. “It will cover our internal coke capacity shortfall and provide Middletown’s blast furnace with a stable, competitive supply of this essential raw material. In addition, we will have the benefit of 50 megawatts of electrical power, or about 25 percent of Middletown Works’ requirement, generated with the waste heat recovered from the coking process itself.”

Briefs
United States Steel Corp., Pittsburgh, has recognized seven North American companies with its Outstanding Supplier Award for 2007. Companies honored with the Outstanding Supplier award were: Avalotis Corp., Berry Metal Co., Fosbel Inc., Hewlett-Packard Co., J.I.T. Steel Service, Kingston Resources Inc., and Praxair Inc.

AK Steel, West Chester, Ohio, announced a $50 per ton increase in spot market prices for its carbon steel products on all new orders after March 24. AK Steel officials said the price increase is in response to increased demand for carbon steel products, as well as the need to recover higher costs for steelmaking inputs.

Nucor Corp., Charlotte, will introduce 44-inch deep wide-flange structural shapes from its Nucor-Yamato Steel Co., joint venture. Nucor-Yamato will become the first mill in the western hemisphere to produce sections at that depth.

Sapa Industrial Extrusions, Cressona, Pa., has made enhancements to its line of extruded aluminum machining stock. The company has introduced ECON-O-ROD Plus and ECON-O-HEX Plus, which offer improved straightness, tighter dimension tolerances, an expanded size range and a wider selection of alloys. 

Koike Aronson/Ransome Inc., a manufacturer of cutting and positioning equipment, has received an Empire Zone designation from the State of New York. The designation qualifies Koike for state tax credits in exchange for $11 million in investments at the company’s Arcade, N.Y., headquarters.

Novelis, Atlanta, will cease production of light-gauge foil products at its Louisville, Ky., facility. Production will be phased out during the second quarter and the plant will be closed.

Coe Press Equipment and Sesco Products Group have announced new sales representatives in the Eastern U.S. region. Mid Atlantic Machinery, Southern States Machinery Inc. and Southern States Machinery Florida Inc. will provide sales and engineering support in their territories for the entire Coe and Sesco lines of press feeding/coil processing equipment.

UC Rusal, Moscow, has acquired a cathode plant in Baoguan, China. The plant’s existing capacity is 9,300 tons of cathode blocks, though Rusal plans to increase capacity to 20,900 tons by 2010.

ArcelorMittal has asked the Ontario Superior Court to require U.S. Steel Canada Inc. and Cleveland-Cliffs Inc. to sell their respective interests in the Wabush Mines joint venture to ArcelorMittal Dofasco. ArcelorMittal claims U.S. Steel Canada and Cleveland-Cliffs agreed to sell their interests in the Wabush Mines joint venture to ArcelorMittal Dofasco in August 2007. Cleveland-Cliffs and U.S. Steel Canada argue that the sale was not finalized, and the two companies have opted to cease negotiating.

The board of directors of Steel Dynamics Inc., Fort Wayne, Ind., has approved a two-for-one split of the company’s common stock in the form of a 100 percent stock dividend. It also approved a 33 percent increase of the company’s quarterly cash dividend.

ArcelorMittal has launched a bid to acquire the remaining shares of ArcelorMittal Brasil S.A. Two groups of shareholders have committed to sell their shares to ArcelorMittal.

Wolverine Tube, Huntsville, Ala., has received commitments from Plainfield Special Situations Master Fund Limited and The Alpine Group of $48.3 million for operational and debt repayment requirements for 2008. Plainfield and Alpine are 8.5 percent shareholders in Wolverine.

Alcoa, Pittsburgh, has been named to Fortune Magazine’s Most Admired list for the 25th consecutive year. The annual ranking serves as a report card on corporate reputations.

Netherlands-based Quintig, a provider of advanced planning, scheduling and supply chain software solutions to the metals industry, has opened an office in Wayne, Pa., to serve its North American customers.

Taiwan Hodaka Technology Co. has ordered two hot jet billet furnaces from Granco Clark, Belding, Mich. The furnaces will be installed in the company’s extrusion facilities in Taiwan.

Nordural Helguvik, a wholly owned subsidiary of Century Aluminum Co., Monterey, Calif., has begun site preparation for a 250,000-ton primary aluminum smelter near Helguvik Iceland. The first stage of approximately 150,000 tons of capacity is expected to be online by late 2010.

Broner Metals Solutions, a provider of supply chain planning, scheduling and manufacturing execution systems for the metals industry, has appointed Metsys Engineering and Consultancy as its official sales and marketing partner in India.

Carpenter Powdered Products Inc., a subsidiary of Wyomissing, Pa.-based Carpenter Technology Corp., has acquired the assets of UltraFine Powder Technology Inc., Woonsocket, R.I. UltraFine is a leader in the manufacture and sale of fine gas atomized powders for the metal injection molding industry and other specialty markets.

Aleris International, Beachwood, Ohio, has chosen Camstar’s InSite management execution system for its Aleris Europe Rolled Products division. The system will provide Aleris with information to meet traceability and quality objectives.

Esmark Inc., Wheeling, W.Va., and Metal Management Inc., have settled litigation in New York state court over scrap purchased by Wheeling-Pittsburgh Steel Corp. from Metal Management. Terms of the settlement were not disclosed.

For the third time in four years, steel maker Nucor Corp., Charlotte, appears on the BusinessWeek 50, which ranks top performing companies based on the rate of return on investment and sales growth over a three year period. Nucor came in at No. 25 on this year’s list.

Kenneth Wisnoski has been named president of global primary products-growth, energy, bauxite and Africa for Alcoa, Pittsburgh. He had been vice president of the business unit. Also, Donna Dabney has been elected a vice president of the corporation by the company’s board of directors. 

Mark Yost has been appointed chief financial officer of Severstal North America, Dearborn, Mich., and SeverCorr, Columbus, Miss. He had been manager of profit analysis and business planning at SNA. He replaces Sergei Kuznetsov, who was appointed CFO of OAO Severstal in Moscow.

Jacqueline Dedo, who held the position of senior vice president of innovation and growth at the Timken Company, will leave the company. Senior Vice President of Technology Alastair Deane, who had reported to Dedo, will now report to President and CEO James W. Griffith as part of a reorganization of the company’s innovation and growth functions.

PLS Logistics Services, Rochester, Pa., has announced five new directors to its operations group. Larry Cox has been appointed director of client satisfaction, Joe Bielawski is director of planning and customer service, Jason Blinkeiwicz heads load movement, Ken McKeever is director of modal/bulk operations and Jim Plunkett heads transportation.