Steel Market Update was contacted by James Banker, Jr., Executive Vice President Commercial this afternoon to advise us their Portage, Indiana EAF (electric arc furnace) steel mill blew a transformer earlier today. There were no injuries, no fire and no damage to their steelmaking equipment. Other than the EAF all other flat rolled steel making equipment is functioning as normal.

The incident occurred as the Electric Arc Furnace was being brought back online after routine maintenance and there was a “flash on the transformer,” according to Mr. Banker. “We have a spare transformer on property and we will change it out,” he told us.

The EAF will be down for 10 days and the mill is adjusting their orders to accommodate a potential outage of up to 14 days. The potential melt loss will be “approximately 30,000 tons” according to Mr. Banker.

“We have enough slabs on the ground [at NLMK-IN] to last about 5 days.” Mr. Banker told us they are evaluating the slabs both at Portage as well as at their sister mill Duferco-Farrell to see what order can be accommodated with existing inventory.

“Some customers will not experience any inconvenience,” although Mr. Banker was not yet sure how much business would be able to be covered with the existing slabs.

The mill was booking orders out to the 3rd week of May when the accident occurred. Mr. Banker felt the mill would be able to get back to their normal on-time delivery schedule – which he pegged at 92% - by the end of May.

The accident is “painful but not disastrous” he told us.