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Mill Outlook

Producers Make Major Investments in 2018

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New capacity, increased production and equipment upgrades highlight mills’ plans for the year ahead.

As 2017 draws to a close, U.S. metal producers are finalizing their plans for 2018 and beyond. Several large projects are scheduled to be completed in the coming months, including Commercial Metals’ new Durant, Okla., micro mill and upgrades at Kaiser Aluminum’s Trentwood facility. While other initiatives, like U.S. Steel’s $1.3 billion asset revitalization program, are just getting under way.

There’s no shortage of major developments at the country’s largest mills. And regardless of where they’re at in the process, a series of new facilities, capital investments and strategic partnerships promise to change the North American production landscape for years to come.

Here’s what the mills have planned in the new year.

Carbon Steel:
In the past year, Charlotte, N.C.-based steelmaker Nucor has announced a series of multimillion-dollar investments at several of its U.S. facilities. The largest of these is the planned installation of a specialty cold mill complex at its Nucor Steel Arkansas division. According to the company, the additional cold mill will increase its ability to produce advanced, high-strength motor lamination and high-strength, low-alloy steel products. The cost of the new mill, as well as expanded annealing capacity at the Hickman, Ark., facility, is estimated at $230 million. Start-up is anticipated in late 2018.

Nucor also announced an $85 million upgrade to a rolling mill at its steel bar facility in Marion, Ohio, as well as rebar micro mill project in Sedalia, Missouri. The micro mill project is expected to cost a minimum of $250 million, with start-up anticipated in 2019, pending the final approval and award of state and local incentives. In November, the company also finalized plans to expand its existing merchant bar operations in Bourbonnais, Ill. The new $180 million merchant bar mill will have an annual capacity of 500,000 tons and take approximately two years to complete.

U.S. Steel will also make significant investments in its operations in the coming years. The steelmaker recently announced a $1.2 billion asset revitalization program for its flat-rolled segment, which will take place from 2017 through 2020. Projected capital spending associated with the asset revitalization program includes $400 million on steelmaking improvements, $300 million on hot strip mills, $300 million on cold mills and finishing equipment, and $200 million on blast furnace upgrades.

Specifically, the program will target blast furnaces at U.S. Steel’s Gary Works and Great Lakes Works locations; a steel shop and caster at Gary Works; a steel shop at Mon Valley Works; hot strip mills at Gary Works, Great Lakes Works and Mon Valley Works; and a cold mill at Mon Valley Works. On an annual basis, the company is projected to spend $200-$250 million in 2017, $450-$500 million in 2018 and the remaining $450-$550 million in 2019 and 2020. Once completed, U.S. Steel expects the asset revitalization program to increase slab production at the three facilities by approximately 1 million tons annually.<

ArcelorMittal is in the process of completing several ongoing projects at its Indiana Harbor facility. As part of its Action 2020 strategic plan, the Luxembourg-based steelmaker is completing a footprint optimization project at the East Chicago plant. The program involves idling redundant operations at Indiana Harbor, including the No. 1 aluminize line, 84-inch hot strip mill, No. 5 continuous galvanizing line and No. 2 steel shop. A new caster has already been installed at Indiana Harbor’s No. 3 steel shop, while restoration of the 80-inch hot strip mill, as well as logistics and finishing improvements, are scheduled to be completed in 2018.

The total range of Action 2020 projects across the U.S. is expected to improve ArcelorMittal’s steel and hot-rolling utilization rates from its current 60-70 percent to more than 98 percent by 2020, according to the company.

In September, ArcelorMittal also announced a $1 billion investment in its Mexican operations. The three-year plan calls for the construction of a new hot strip mill, which will give ArcelorMittal Mexico the ability to produce 2.5 million tons of flat-rolled steel, 1.8 million tons of long steel and approximately 1 million tons of semi-finished slabs annually.

Commercial Metals Co., Irving, Texas, has plans to commission a new micro mill in Durant, Okla., in the first half of 2018. The micro mill will utilize Danieli technology and equipment, and is projected to cost in excess of $250 million. Earlier this year, the company also announced that it will construct a highly automated steel fence post manufacturing facility at the Durant site. Shipments from that facility are scheduled to begin in the summer of 2018.

Charter Steel is currently building a new special bar quality bar mill at the site of its existing coil mill and steelmaking operations in Cuyahoga Heights, Ohio. The $150 million project is scheduled for completion in the second half of 2018, according to the company. Once finished, the highly automated SBQ rolling mill will be capable of producing diameters from 0.75 to 3.25 inches in bar lengths of 12 to 50 feet. The Saukville, Wis.-based company is a supplier of carbon and alloy steel bar, rod and wire products.

Steel Dynamics Inc., Fort Wayne, Ind., is expanding its structural and rail division in Columbia City, Ind. The $75 million project includes the addition of a rolling mill, as well as additional equipment and infrastructure improvements. The company anticipates annual production of 240,000 tons of reinforcing bar in various sizes, with products ranging from coiled, custom cut-to-length and smooth bars in sizes from No. 3 to No. 8 rebar. Initial projections put the completion date in the fourth quarter of 2018, but company officials say that timeline is dependent on receipt of necessary permits, as well as state and local government support.

Stainless Steel:
The creation of a new joint venture between specialty metals producer Allegheny Technologies Inc., Pittsburgh, and Chinese stainless steel manufacturer Tsingshan Group will bring ATI’s previously idled direct-roll anneal and pickle facility back online in coming months. Allegheny & Tsingshan Stainless will manufacture and sell 60-inch-wide stainless sheet to the North American market, with the first shipments expected in early 2018, the companies announced in November.

As part of the agreement, Tsingshan will supply stainless slabs from its Indonesian operation to ATI’s hot-rolling and processing facility in Brackenridge, Pa., where they’ll be hot-rolled into coils. Those coils will be finished into stainless 
sheet at a direct-roll anneal and pickle finishing line in Midland, Pa, which will be owned and operated by the joint venture. Allegheny & Tsingshan Stainless is expected to ramp up production through 2018.

Despite a slower than anticipated ramp up of new equipment and automation controls at its Trentwood site, Kaiser Aluminum Corp. executives claim the $150 million investment in a new Spokane, Wash., rolling mill will be fully realized by year’s end. “Synchronization of the new equipment and automation installed at our Trentwood facility during the second quarter proved more difficult than anticipated, and as a result, Trentwood experienced lower than expected throughput in the third quarter,” Kaiser CEO Jack Hockema said during the company’s third-quarter conference call. “We continue to make steady progress in the ramp up and expect to be fully operational before the end of the fourth quarter.”

As part of the multimillion-dollar investment, Kaiser completed equipment upgrades that the company says will reduce conversion costs and increase overall efficiency at the Trentwood site. The primary focus of the project is to modernize legacy equipment and improve process flow for thin-gauge plate to increase quality standards for aerospace and general engineering products, according to the company. Once completed, the project is expected to expand Trentwood’s manufacturing capacity by 5-10 percent.

Braidy Industries Inc., Ashland, Ky., will break ground on an auto body sheet and aerospace plate aluminum rolling mill in Eastern Kentucky in the first quarter of 2018. The mill is expected to cost $1.3 billion and take two years to complete. It will be located near the city of Ashland in Greenup County.

According to Braidy, the project will be the first greenfield aluminum rolling mill in the U.S. in more than three decades. The mill will produce series 5000, 6000 and 7000 aluminum sheet and plate products for the automotive and aerospace industries, with annual capacity projected at 370,000 tons.

Cleveland-based aluminum manufacturer Aleris is looking to ramp up production at its Lewisport, Ky., operations in 2018, after a recent outage associated with the site’s new $400 million aluminum automotive body sheet production facility. The company announced in November that the Lewisport facility has started to ship auto body sheet and wide non-auto body sheet to customers using the re-engineered hot mill, as well as a new wide cold mill and the first of two continuous annealing lines.

“The opening of our new automotive facility in Kentucky marks the completion of a significant piece of our strategic realignment, which includes expanding our capacity and capabilities to serve the automotive industry and other high-value end uses,” Aleris chairman and CEO Sean Stack said. Lewisport will continue its ramp up through 2018. According to Aleris, the new facility will allow for the annual production of 480 million pounds of aluminum auto body sheet once it is fully operational.

In July, Pittsburgh-based Alcoa Corp. began the process of restarting three of five potlines at its Warrick Operations’ aluminum smelter in Evansville, Ind. The restart is scheduled for completion in the second quarter of 2018. The three potlines, which represent 161,400 metric tons of annual capacity, will directly supply the company’s Warrick rolling mill.

Logan Aluminum recently completed the phase 1 expansion of its facility in Logan County, Kentucky. The roughly $250 million expansion included an aluminum recycling and ingot casting facility, and increased capacity at its rolling mills and scalping and pre-heating operations. The ingot casting facility is expected to produce approximately 600 million pounds of cast ingot annually for processing at Logan Aluminum.

The company also broke ground on phase 2 of the project, which includes a 65,000-square-foot cold-rolling mill. The $125 million project will add production capacity to Logan Aluminum’s existing cold-rolling operation for beverage can stock and rolled sheet for automotive body and structural panels. Construction should be completed by early 2019, with production expected to begin in the spring.

Pipe and Tube:
TimkenSteel will increase its quench-and-temper capacity by 50,000 tons annually thanks to a new $40 million thermal-treatment facility at the company’s Gambrinus Steel Plant in Canton, Ohio. The producer of large alloy steel bars and seamless mechanical tubing brought the advanced quench-and-temper facility online in late 2017 with the goal of meeting increased market demand for thermal-treated bars and tubes. TimkenSteel will produce 4- to 13-inch bars and tubes at the site, bringing the company’s total thermal-treatment capacity to 500,000 process tons per year.

Luxembourg-based steel pipe manufacturer Tenaris has begun production at its new $1.8 billion seamless plant in Bay City, Texas. The first seamless pipe was produced at the facility in October, and the company is expected ramp up production through 2018. Once fully operational, the plant will be capable of producing 600,000 tons of oil country tubular goods annually.