Steel Products
BlueScope Reports Profitable 1st Half for Their Share of North Star
Written by Sandy Williams
February 20, 2013
Written by: Sandy Williams
Australian company BlueScope Steel announced earnings for its portion of North American segment, North Star BlueScope Steel, of $33 million EBIT for the first half of FY2013 ending December 31, 2012—a 65 percent improvement over the first half of FY2012. The North Star BlueScope Steel is a 50-50 venture between BlueScope Steel Ltd. and Minnesota based Cargill, Inc. The company is located in Delta, Ohio and produces hot rolled coil.
BlueScope attributed the growth in earnings to better spreads between steel selling prices and raw material costs, reduction in depreciation charges, and improved operating and cost performance.
“This is just a great business,” said Paul O’Malley, Managing Director and CEO of BlueScope in the company conference call. “We are able to sell every ton we produce.”
BlueScope’s portion of North Star shipped 525,000 tons of steel in the first half of 2013, compared to 528,000 tons shipped in the first half of 2012 and 533,500 tons in the second half.
Potential expansion projects for North Star BlueScope Steel include a possible one million short ton DRI plant and a second slab caster and new shuttle furnace to upgrade production capacity from 2.1 million tonnes (2.3 million tons) annually to 2.5 million tonnes (2.75 million tons). The projects are still in the consideration phase and the company will have more information at their August meeting.
“In North America, we expect North Star BlueScope Steel to continue its very good performance and further growth opportunities for this business are being investigated,” said BlueScope in its press release.
The shipment of steel reported above is for BlueScope’s 50 percent share in North Star. Multiplying 525,000 tons by 2 we can assume 1,050,000 net tons for North Star in its first half of FY 2013. At that rate, North Star appears to be on track for close to full capacity at about 2.1 million net tons in FY 2013.
Sandy Williams
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