One Minimill Opens, Another on the Way

Republic Steel to build new electric-arc furnace in response to rising auto industry sales, while Severstal opens new minimill.

Republic Steel plans to fill increasing demand from the resurgent auto industry and the energy market with a new electric-arc furnace scheduled to be completed in mid-2013.

The company said Nov. 16 it will invest $85.2 million to construct a new electric-arc furnace at its steelmaking facility in Lorain, Ohio. The Canton, Ohio-based company is responding to growing demand for its special bar quality steel, which is used in various automotive applications including crankshafts and suspension components.

Some of the increased demand is related to rebounding auto industry sales and "reshoring" of operations in the United States, said Mark Huemme, Republic Steel's director of marketing.

"Auto industry sales in general are rebounding, and I think, hopefully, at what will be a sustainable rate," Huemme said. "In addition, you have a number of jobs being repatriated."

The auto industry has moved some jobs back to the United States, particularly after natural disasters in Japan and Thailand disrupted their supply chains, Huemme said.

The company also has realized increased demand related to unconventional oil and gas exploration. The Utica and Marcellus shale fields have provided new opportunities for the company's tubular steel products.

Republic Steel expects the new furnace will increase its steel production by 1 million tons annually and create 449 jobs.

Severstal Completes Minimill

Meanwhile, Severstal North America, a division of Russian steelmaker OAO Severstal, said Nov. 16 it completed the second phase of its Columbus, Miss., expansion project that includes a second electric-arc furnace.

The company invested $550 million in the project that also includes a ladle metallurgy furnace, caster tunnel furnace and hot-dip galvanizing line.

The expansion will increase Severstal Columbus' annual steel production to 3.4 million tons, doubling the plant's steel-making capacity.

Additional capacity from new startups will likely contribute to lower steel selling prices for the remainder of the year, say many U.S.-based firms and analysts.

The company completed the first phase of its Columbus project in 2007, which included an electric-arc furnace that recycles scrap steel for the auto industry, pipe and tube and appliance applications.

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