U.S. Steel, ArcelorMittal Reach
New Deals with Union Employees
United States Steel Corp., Pittsburgh, and ArcelorMittal USA, Chicago, have reached separate agreements on new four-year labor contracts with the United Steelworkers.

U.S. Steel reached an agreement in early August that covers approximately 16,000 workers represented by the United Steelworkers at the company’s flat-rolled and iron-ore mining facilities and two tubular operations. The agreement replaced the contract that expired Sept. 1.

“We value our ongoing relationship with the USW and appreciate the contributions that our employees make to the success of our business,” says U.S. Steel Chairman and Chief Executive Officer John P. Surma. “We believe that this agreement is in the best interests of our company and all of our stakeholders.”

The agreement covers USW members employed at Granite City, Ill.; Gary, East Chicago and Portage, Ind.; Ecorse, Mich.; Braddock, Clairton, West Mifflin and Fairless Hills, Pa.; Fairfield, Ala.; Lorain, Ohio; Keewatin and Mt. Iron, Minn.; and Lone Star, Texas.

“We’ve gone through some tough times in the steel industry during the last 20 years,” says USW International President Leo Gerard. “Our union was instrumental in restructuring the industry. This new contract rewards our members for their hard work and improves the living standards of our retirees. The capital investments that will be made in our mills protects our communities far into the future. This contract is the new standard in the industry.”

A second four-year agreement was reached with 900 USW employees at the company’s tubular products Texas Operations division.

Strike averted at ArcelorMittal
ArcelorMittal and the United Steelworkers reached a tentative agreement on a new, four-year contract two days after the union membership authorized its bargaining team to call for a strike.

The agreement still had to be presented for ratification to an estimated 14,000 USW-represented hourly production, maintenance, office and technical employees at ArcelorMittal facilities in eight states. The union opted not to disclose specific terms of the new agreement until its members had the opportunity to review it with bargaining committees.

ArcelorMittal officials also refused to comment on the specifics of the tentative agreement, though acknowledged they were glad that a deal had been struck without any disruption to business operations.

Nucor to Restart Production at Arizona Bar Mill
Nucor Corp., Charlotte, N.C., plans to begin steel bar production at its previously idle rolling mill in Kingman, Ariz. Nucor expects capital improvements necessary to restart production to total about $30 million and expects rolling operations to begin in Kingman by the second quarter of 2009.

Initial annual output of straight-length rebar, coiled rebar and wire rod should be about 250,000 tons. The Kingman mill will have the capability to increase annual production to more than 500,000 tons.

Nucor acquired North Star Steel’s idled Kingman steel mill in 2003 for a purchase price of approximately $35 million. In 2004, Nucor decided that Kingman’s melt shop would not be restarted and recorded a $13 million impairment charge for the melt shop assets. Kingman’s rolling mill assets have been held available for restart whenever market conditions warranted. The decision to start rolling rebar and wire rod products is driven by growing demand in the southwestern U.S. market from both Nucor’s outside customers and Nucor’s expanding downstream rebar fabrication business.

“Kingman’s very attractive capital cost for rolling steel will be leveraged by excess low-cost melting capacity at our existing bar mills,” says Dan DiMicco, Nucor’s chairman, CEO and president. “Startup of our low-cost rolling mill in Arizona is an exciting growth project in the very attractive southwestern U.S. market for rebar and wire rod. Nucor Steel Kingman will build upon Nucor’s position as North America’s largest rebar producer. The restart of this facility expands our highly successful vertical integration business model.”

Other acquisitions
In other action, Nucor’s wholly owned subsidiary, Harris Steel Inc., has completed the acquisition of Ambassador Steel Corp., Auburn, Ind., for a cash purchase price of approximately $185 million. The transaction includes the shares of Ambassador’s affiliate, Delta Erecting. At closing, Harris Steel also repaid Ambassador’s bank debt of approximately $136 million.

Ambassador is a fabricator and distributor of concrete reinforcing steel and related products. Founded in 1974, Ambassador has grown to be one of the largest independent fabricators and distributors of rebar in the United States. In 2007, Ambassador shipped 422,000 tons of fabricated rebar and distributed another 228,000 tons of reinforcing steel.

“We are excited and proud to welcome the Ambassador employees to the Nucor and Harris family,” says Hamilton Lott, Nucor executive vice president. “Ambassador expands our rebar fabrication footprint through the Midwestern, Gulf Coast and Southeastern regions of the U.S. Just as we expected, Harris Steel has proven to be a powerful downstream growth platform for Nucor. With the addition of Ambassador to the other acquisitions Harris Steel has completed, our rebar fabrication business has more than doubled since Nucor acquired Harris Steel in March 2007.”

Another Nucor subsidiary, The David J. Joseph Company, has agreed to acquire the American Compressed Steel operations of Secondary Resources Inc., Kansas City, Mo. In addition, DJJ has completed the acquisition of Victoria, Texas-based Victoria Recycling.

American Compressed also operates scrap-recycling facilities in St. Joseph and Sedalia, Mo. American Compressed employs 112 people and processes nearly 180,000 tons annually. Victoria Recycling processes over 24,000 tons annually.

“The addition of the American Compressed Steel and Victoria Recycling facilities demonstrates one more step toward helping Nucor achieve our long-term goal of expanding scrap sourcing, using DJJ as a platform for that growth,” says DiMicco. Nucor is the largest purchaser of ferrous scrap in North America, with total scrap purchases of 22.8 million tons in 2007.

SSAB to Invest $820 Million
in Q&T lines in U.S., Europe
SSAB will invest $820 million in Sweden and the United States to meet the growing global demand for quenched and tempered steels. SSAB will invest at the Swedish sites of Borlange and Oxelosund and one in the United States.

The investment in the U.S. will be made at one of SSAB’s two plate mills, in Montpelier, Iowa, or Mobile, Ala. The new line will have a capacity of 300,000 tons, plus other upgrades to the facilities.

“The investment program is part of SSAB’s strategic focus to strengthen the product portfolio towards more value-added steel products, and to further meet customers’ growing demand for quenched and tempered steels,” says Olof Faxander, CEO of SSAB.

Global demand for Q&T steels has demonstrated strong growth in recent years. Q&T plate and strip are used throughout the manufacturing and construction sectors in applications where properties such as strength, hardness and toughness are required beyond those available within commercial grades. SSAB’s product offering provides significant economic and environmental advantages compared to less advanced steels, SSAB claims.

Tenaris Plans New Rolling Mill in Mexico
Tenaris S.A., Luxembourg, plans to increase its production capacity by installing a modern, small-diameter rolling mill with an annual production capacity of 450,000 tons of seamless pipe at its industrial facilities in Veracruz, Mexico. The installation of the mill, together with associated iron and steel making and finishing facilities, will require an investment of approximately $1.6 billion. The mill is expected to begin operations by 2011.

In addition to this investment in Mexico, Tenaris plans to continue to invest in its industrial facilities throughout the world. Its capital investments, excluding the new mill in Mexico, are expected to amount to approximately $450 million per year over the next three years.

With these investments, Tenaris plans to increase its industrial capacity to meet the growing needs of its customers in Mexico and worldwide, as oil and gas drilling activity expands and becomes more complex, the company claims.

Tempel Steel Expanding Chicago Operation
Tempel Steel will expand its plant in Chicago as part of a consolidation of operations in North America. The company will add 40,000 square feet of manufacturing space at its Chicago site while closing down operations at its Libertyville, Ill., operation.

With the move, Tempel Steel will bring together its small motor and transformer manufacturing operations into the single site in Chicago. Equipment will be refurbished and upgraded as part of the move.

“We felt with the two groups under one roof, we’d be a much more efficient operation,” says Harry Feldman, vice president of NAFTA operations for Tempel Steel.

The company also has operations in Canada, Mexico, China and India. The Chicago operation will become its only facility in the United States.

Kaiser’s Income Falls in Second Quarter
Kaiser Aluminum Corp., Foothill Ranch, Calif., reported net income of $22.8 million for the second quarter of 2008, a drop of 52.2 percent from the same quarter in 2007. For the first six months of 2008, net income was up 19.5 percent over 2007.

“We continued to experience robust demand for aerospace and defense products,” Jack A. Hockema, president and CEO, told analysts and investors. “However, our results were negatively impacted by escalating energy-related costs and operating inefficiencies in our rod/bar value stream, which our energy surcharge and our Kalamazoo initiative are intended to address.”

Net sales for the second quarter increased 7 percent to $413.5 million. For the first half, net sales were up 5 percent to $812.5 million. The gain primarily reflects an 8 percent increase in shipments from the fabricated products segment and an increase in primary aluminum realized prices. Those were partially offset by a reduction in primary aluminum shipments due to the fire at the company’s Anglesey plant that significantly reduced production in the latter half of June 2008.

“We expect our strong overall shipments trend to continue throughout the second half 2008, driven by sustained strong aerospace and defense demand for heat-treat plate and other products,” said Hockema. “Our new automotive programs and selected export opportunities are anticipated to partially offset the weakness in domestic automotive demand. We anticipate the energy surcharge implemented as of July 1 will begin to soften the negative impact of volatile energy costs.”

The third and final phase of the heat-treat plate expansion program began as planned in June, resulting in a scheduled production interruption on one heat-treat furnace to expand its capacity. The furnace is expected to be fully operational by the end of 2008.

The Kalamazoo facility is on track for completion by late 2009 and is expected to significantly improve the cost structure of rod/bar production. Additional planned outages are scheduled in the third quarter of 2008 to install equipment upgrades at the company’s Los Angeles, Chandler, Ariz., and Tulsa, Okla., operations. 

Aleris Shows Improved Results
Despite Second-Quarter Loss
Aleris, Beachwood, Ohio, reported second quarter 2008 revenues of $1.7 billion and a loss from continuing operations of $900,000, compared to second-quarter 2007 revenue of  $1.5 billion and income from continuing operations of $22.7 million.

For the first six months, Aleris reported revenues of $3.3 billion and a loss from continuing operations of $300,000. This compares to revenues of $2.9 billion and a loss from continuing operations of $21.7 million in the first six months of 2007.

“We are certainly pleased to show improved results in the second quarter vs. last year, despite the recessionary conditions prevalent in North America, as well as pockets of softness in certain European end-use industries that led to lower volumes in both of our global business segments,” said Steven J. Demetriou, chairman and CEO of Aleris, during the company’s quarterly conference call. “We believe our productivity programs coupled with aggressive proactive commercial initiatives to offset commodity cost inflation will result in significantly lower unit costs and higher profitability when demand strengthens.”

While Aleris reported significant declines in North American building, construction and transportation industry shipments in the second quarter, it saw a solid gain in shipments of rolled aluminum products to North American service centers, which now have very lean inventory levels following the destocking that was completed in the first quarter.

Demetriou said that with these inventory levels, Aleris should continue to experience “very solid year-over-year volumes” to distribution, at least through the end of this year.

Correction
A caption on page 10 of MCN’s August issue stated that TMW and its equipment vendor Red Bud Industries have commissioned seven SCS lines in the U.S. and Europe so far. In actuality, 10 SCS lines are up and running and another is being built for installation in Europe. SCS is a proprietary process developed by TMW in which hot-rolled black steel is brushed, giving it a smooth, clean, corrosion-resistant surface suitable for cutting and painting.

BRIEFS
AK Steel and members of the United Steelworkers Local 8-523 have ratified a new three-year labor agreement covering about 240 hourly production and maintenance employees at the company’s Ashland, Ky., coke plant. The new agreement takes effect immediately and runs through Oct. 31, 2011.

Essar Steel Algoma, Sault Ste., Marie, Ont., has begun the startup of its No. 6 blast furnace. The furnace is a vital component of Essar Steel Algoma’s planned expansion to four million saleable tons, the company says. The company is also investing nearly $90 million in air emission controls over an 18-month period, ensuring an overall net reduction in air emissions.

Alcoa has begun the process of laying off approximately 300 employees at its Rockdale, Texas, smelter due to local power issues. The plant was partially shut in June because of ongoing supply issues with Luminant’s onsite power generating unit. Three of the plant’s six operating potlines were idled as a result of the ongoing unit outages and excessive local energy market costs, Alcoa claims.

Commercial Metals Co., Irving, Texas, has completed the acquisition of Reinforcing Post-Tensioning Services Inc., Regional Steel Corp., and RPS Cable Corp., Claremont, Calif. RPS is a fabricator and installer of concrete reinforcing steel, post-tensioning cable and related products for commercial and public construction projects with facilities in Fontana and Tracy, Calif., and Las Vegas, with an annual capacity of 150,000 tons.  

Kennametal Inc., Latrobe, Pa., will acquire Tricon Metals & Services Inc., Birmingham, Ala., a provider of custom wear solutions specializing in proprietary steels for the surface and underground mining market. Tricon will become part of Kennametal’s Advanced Materials Solutions Group.

OAO Severstal, Moscow, Russia, will acquire the business of PBS Coals Corp., through its Severstal Resources mining division. PBS is engaged in the mining, processing and sale of metallurgical and thermal coal in Somerset County, Pa.

Parker Steel, Toledo, Ohio, has begun offering square carbon steel telescopic tubing. Its tight tolerance allows another tube or another solid shape to slide inside the tube without problems, the company claims. 

Indalex, Lincolnshire, Ill., is including energy surcharges on all new orders for aluminum extruded products. The surcharges went into effect Aug. 11 and are based on U.S. Department of Energy published prices for natural gas, diesel fuel and electricity.

Keymark Corp., has chosen Granco Clark, Belding, Mich., to provide two chest-style die ovens for its facility in Fonda, N.Y. Keymark Corp. is a full-service aluminum extrusion company with facilities in Lakeland, Fla., as well as in Fonda.     

Eriez, Erie, Pa., has entered a representative agreement with Weinacht & Associates, a marketing firm that represents manufacturers of cutting tools, welding equipment and metalworking accessories. The company will market Eriez products in North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas, Missouri, southern Illinois and western Wisconsin.

Alcoa’s Lafayette, Ind., facility has been awarded an Occupational Excellence Achievement Award for Safety Excellence in 2007 from the National Safety Council. The Lafayette plant produces aerospace components and aluminum extrusions and tubes for customers worldwide.                     

ArcelorMittal, Luxembourg, will acquire 49 percent of the shares of Mineração Pirâmide Participações Ltda, a Brazilian mining company. MPP’s activities are focused on the exploration and development of iron ore and manganese reserves in the region. 

The TRUMPF Group, Ditzingen, Germany, achieved sales growth of approximately 10 percent in the 2007-2008 fiscal year to approximately $3.15 billion. Officials attributed the increased sales to a strong worldwide economy and high demand for manufacturing and production equipment.

PEOPLE
Steel Dynamics Inc., Fort Wayne, Ind., has made several management changes at its OmniSource subsidiary. New executive vice presidents include Tommy Tuschman, EVP for strategic sourcing and business development; Larry Adelman,  EVP of the nonferrous group; and Marvin Siegal, in charge of OmniSource Southeast. New vice presidents include Rich Brady, VP of ferrous sourcing and marketing; Bob Brewer, VP of ferrous operations; and Jason Redden, VP of national accounts and foundry sales; Steve Alberico, VP of nonferrous sourcing and marketing; and Jeff Rynearson, VP of nonferrous operations. Also, Superior Aluminum Alloys Inc. President Denny Luma is now a vice president of OmniSource.

National Bronze & Metals Inc. has made two appointments to its production team at the company’s Lorain, Ohio, facility. Rich Sutton will serve as production manager and Pete Zimmer as materials manager. Both had been employed by Bolton/Cerro Metal Products.

Stephen R. Morris has been named executive vice president of operations for Koike Aronson/Ransome Inc., Arcade, N.Y. Morris will oversee finance, manufacturing, purchasing, scheduling, information systems and customer service in his new position.