Severstal NA Columbus, MS plant - our tour
Apr / 22 / 2010 - Severstal NA Columbus, MS plant - our tour
SMU visited the Severstal NA steel mill in Columbus, MS - here are our notes from our tour
While the rest of the steel industry struggled during 2009 – Severstal Columbus (MS) plant ran at an average of 84 percent of capacity according to comments made by the plants CEO – Jim Hrusovsky during a Rotary Club meeting in January of this year and reported by The Dispatch out of Columbus, Mississippi. When SMU questioned the accuracy of the article Mr. Hrusovsky told SMU the mill ran 84 percent of the available days during the calendar year 2009 – when looking at actual capacity utilization rates Mr. Hrusovsky told SMU, “ If you consider actual capacity versus actual production, the number can vary depending on how fully you are running your operation. However, our estimate of 80 to 85 percent of capacity utilization for most of 2009 and into early 2010 is a good number.”
When looking at the capacity utilization rates for the industry provided by the AISI which were in the low 40% range during a portion of 2009 and ended up the year only in the mid to high 60% range one has to be impressed with the performance of the Columbus facility. SMU wanted to learn more about why this plant was doing so well – here is what we found….
On Thursday of this past week SMU toured the Severstal Columbus (MS) steel mill. The Columbus plant is the only Severstal NA mill producing steel using an electric arc furnace (although there is a second EAF at Wheeling currently not in operation). The mill has a strong order book with lead times into June. The mill has an annualized maximum capacity of 1.7 million short tons (1.9 million tons is peak capacity is they were running at full width only).
Production at this plant is different than what will occur at the ThyssenKrupp mill in Alabama which we visited the day before. The Severstal mill uses scrap (mostly a mixture of busheling and shredded scrap but also pig iron and other ingredients depending on the steels being produced) which is melted using electrodes which are lowed into the mixture and charged with electricity which produces an “arc” melting the materials and producing liquid steel.
The Severstal plant charges their furnace with 185 tons of scrap which produces about 175 tons of melt. A new heat is produced approximately every 40 minutes depending on the product being made. The goal is to produce 250 tons per hour. In the photo the scrap has just been added and the crane is moving the scrap bucket that just brought its material to the EAF.
In speaking to one of the plants engineers during the tour – the mill has the ability to control the amount of carbon during the melting and casting process. Their CS/B material has a maximum carbon of .07 although most is produced closer to .04 carbon and, according to a customer of the mill’s who was on the tour with us, their commercial steel is very ductile with lower Rb’s and tensile than material they have purchased from SDI and Nucor. The difference, according to a Severstal Columbus engineer is in their rolling practices.
Their hot strip mill (HSM) is able to roll .055” to .625” thickness in a width range of 36” to 74” although during our discussions with the mill we learned they have run 75.5” wide material for the line pipe industry. The capacity of the hot strip mill is approximately 3.4 million tons (3.0 million metric tons) although their existing melt capacity is approximately 1.7 million tons.
The mill can produce the following mixture of products with its existing equipment (phase 1):
Hot Rolled = 325,000 tons annually (295,000 metric tons).
Hot Rolled Pickled & Oiled = 250,000 tons annually (227,000 metric tons).
Cold Rolled Full Hard = 100,000 tons annually (91,000 metric tons).
Cold Rolled Fully Annealed (batch anneal) = 575,000 tons annually (522,000 metric tons).
Galvanized & Galvannealed = 450,000 tons annually (408,000 metric tons).
Cold rolled can be produced in thickness range from .012” to .090” in widths 36” to 72.5”.
Galvanized/Galvannealed can be produced in thickness range from .015” to .062” (using only FHCR substrate).
Phase 2 – Partially Completed
Severstal NA has approved the continuation of phase 2 – part of which is already complete as much of the foundation work and buildings were completed prior to phase 2 being put on hold due the economy. Much, if not all, of the equipment is also on site and one of the engineers told SMU the work could be completed in “4 to 5 months” if pushed although the official company position is the work will take 7 to 8 months to complete. Most of the remaining work on phase 2 is not scheduled to begin until after January 1, 2011.
The second phase will essentially double the mills capacity from 1.7 million tons to 3.4 million tons. A second EAF, a second Ladle Met. Furnace (with expanded vacuum degassing capability) and a second caster with shuttle to the HSM as well as a new push/pull pickle line and an additional galvanizing line are all part of phase 2. The new galvanizing line is forecast to be in operation by October 2011 and will have a thickness range slightly heavier than their existing line. The new GI line (no GA) thickness range will be .039” to .135” in widths from 36” to 72”.
While touring the Severstal NA Columbus steel mill it became apparent the employees of the mill were very proud of the fact they are busy and have been for a number of months. With demand growth occurring all around them our expectation is they will remain busy for the near future. The question in everyone’s mind outside of the mill is what impact the new ThyssenKrupp mill will have on the Columbus facility?
Perhaps one of the engineers on the plant floor answered the question on behalf of all the Severstal employees when he told SMU “If your product adds value for the customer then there will always be a position for you.”
