Steel Mills

Interview with JSW USA CEO John Hritz

Written by Tim Triplett

Over this weekend, Steel Market Update had two conversations with JSW USA President & CEO John Hritz.  On Saturday, we spoke about the successful start-up of the electric arc furnace at their JSW Ohio steel mill in Mingo Junction. On Sunday, we spoke in more detail about JSW USA and the company goal of being a 100 percent domestic plate, pipe and hot rolled steel supplier. With the start-up of the JSW Ohio “hot end,” the company has taken another big step toward becoming a player in the commodity hot rolled market.

Hritz did not mince words as he discussed the challenges the company faces at JSW Ohio. “The cost saving [of melting their own steel versus buying foreign slabs] is substantial,” he told SMU. Now that the mill has taken the first step and will be making steel for trial and then production orders going into 2019, their focus will be on quality – especially off the hot strip mill.

JSW USA“We are working hard on the hot strip mill. It needed a lot of attention, and we are giving it that attention. The goal is to create perfect quality steels,” he said.

Hritz spoke openly about being able to rebuild equipment and train people. “The hardest thing to rebuild is a company’s reputation.”

We asked if there is another mill they are emulating as they try to build a new reputation for a mill that was shuttered before being reborn as Acero Junction and now JSW Ohio. “We want to emulate ourselves. We have the right recipe,” he said. Hritz pointed to the success of JSW’s Baytown, Texas, plate and pipe mill, which is running at full capacity and is booked well into calendar year 2019. “We will have the lowest cost, the best quality, and we will be there in less than two years,” he added.

He wanted to make sure that Steel Market Update understood the comments he made on Saturday regarding buying foreign slabs for the JSW Ohio steel mill. “Our goal is for JSW USA to be a 100 percent melt and manufactured in the United States steel supplier, and we will be there in about two years.”

We discussed the issue JSW USA is having with the tariffs on the 10-inch and 12-inch slabs, as well as API grades, that have to be imported. JSW USA filed for an exclusion on the 10-inch and 12-inch slabs. Three domestic mills filed objections to their exclusion requests. There have been rebuttals made, but still there is no decision from the U.S. Department of Commerce. Hritz told SMU that the domestic mills filed objections against all of the other domestic mills that need to buy foreign slabs and, as far as he knew, not one slab-buying mill had received a final decision. “If they could be sourced here, JSW would buy them here,” he added.

JSW will need imported slabs for only a limited amount of time as their new EAF at Baytown is under construction and should be able to run the 10-inch, 12-inch and API grades needed to replace foreign suppliers upon completion.

JSW USA is spending about one billion dollars ($1,000,000,000) on the improvements at Baytown and Mingo Junction, Hritz said.  “It’s about creating jobs,” he added, jobs that will be secure due to the technology being incorporated into these two mills.

As the new EAFs (one at Baytown and one planned for Ohio) come online over the next two years, JSW USA will become a 3-million-ton flat rolled mill, a 1-million-ton plate mill and 500,000-ton pipe mill. “We are going to do something that no one has done, particularly on plate and energy,” Hritz said.

A second EAF for JSW Ohio is in the “design process” and is on paper now, with an expectation that it could be operational within the next two years, Hritz said. However, business conditions can affect that process and the assumption for the second furnace is predicated on a successful introduction of the product from the furnace just brought online.

Hritz told us they are being “thoughtful about volume so we can stay on top of maintenance.” JSW Baytown has an OSHA recordable rate of one (1), he noted.

JSW USA has taken another step in the long process toward building JSW as a brand to be reckoned with in the near future.

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