U.S. Steel to Restart Lake Erie Blast Furnace by June
The U.S. Steel Lake Erie Works blast furnace and other steelmaking facilities will be restarting during the 2nd Quarter 2010 according to comments made by the company during their earnings conference call with steel analysts on Tuesday. The Lake Erie plant has the ability to make 2,400,000 short tons of raw steel per year or, about 6,600 tons of melt per day from their furnace according to the AIST.
During the call John Surma, CEO of U.S. Steel told the analysts the Lake Erie blast furnace would take some time to get back up. He reported that there are contractors inside the furnace now checking to see what needs to be repaired and what is necessary to bring the furnace back to life. Mr. Surma felt it would be the latter part of June before the hot end of the mill was up and running.
With the restart of the Lake Erie facility U.S. Steel will have all of their North American operations up and running – including all of their steelmaking operations (blast furnaces/BOF’s).
Mr. Surma made an interesting observation about the mills already up and running – he told the analysts their mills have been running at 95% capacity utilization rate since the #14 blast furnace had come back online. Here is a quick dialogue between John Surma and J.P. Morgan analyst Michael Gambardella regarding capacity utilization rates with the #14 furnace back up:
Q – Michael Gambardella: Got a question on the Gary 14 furnace. My understanding I think from what you’ve said in the past that one furnace represents about 15% of your North American flat-roll capability?
A – John Surma: It’s 8,000 tons a day plus or minus, and you could probably work out the math. It’s probably in that vicinity.
A – Gretchen Haggerty: We’ve been saying that for a number, yeah.
Q – Michael Gambardella: So then if you’re running at 95% of your capability today with that furnace, your North American flat-roll operations in the second quarter should have shipments about 14, 15% higher or more?
A – John Surma: I didn’t run the percentages, but I think you’re pretty good with a calculator, Mike. I’ll let Gretchen comment on that further, but I think you heard Gretchen’s comment about our current utilization rate. If we would continue at that level, assuming we ship everything, which would be our plan that would take us in that direction.