Steel Mills

NLMK Says No U.S. Investment While Tariffs are in Place
Written by Sandy Williams
June 2, 2019
NLMK Group has backed off from plans to invest in its U.S. division due to the steel duties that were imposed in 2018. The Department of Commerce has denied the Group’s request for exemption from the 25 percent Section 232 tariffs so that it can supply its facilities with steel slab.
“Earlier we planned to upgrade rolled stock in the U.S. with substantial investment there, whereas now we understand that we should suspend that. We will wait, that is the matter of time, we will suspend investment in this regard until restrictions are removed,” the company’s main shareholder Vladimir Lisin told reporters at Russian news agency TASS on Friday.
NLMK USA relies on imports of slabs from its parent company in Russia and has said “it is difficult to impossible” to buy American-made slabs to use in production. The U.S. operations, which include NLMK Pennsylvania, NLMK Indiana and Sharon Coatings, require more than 200,000 tons of slab per month.
CEO Grigory Fedorishin said the company is struggling to source enough material to supply its operations in the U.S. “At the moment, we do not deliver Russian slabs there. At the moment, we buy Brazilian slabs and we partly buy U.S. slabs,” said Fedorishin.
“Now we live in the market, pretty much. We sit down every month or two and start deciding from scratch where we’re going to source (steel slabs),” he added.
NLMK Group had planned to invest $600 million in its U.S. operations in Pennsylvania to improve efficiency and costs. The proposed upgrade would have included a new walking beam reheat furnace. Although there was previously some concern that the U.S. facilities would be forced to close because of the tariffs, Fedorishin said the company currently continues to be committed to its U.S. market.
“We’re looking very carefully at our strategy to see how to make it effective,” he added.
Lisin said he expects a deficit of slabs in the U.S. will result in higher prices for semi-finished steel and for downstream products. A situation in which the U.S producer and consumer “will not be glad.”
Lisin did not rule out a future investment at NLMK USA should the trade environment return to normal.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills

Hot-rolled coil market remains slow, market participants say
Hot rolled spot market participants reported another week of moderate demand and ample supply, with no strong signs that conditions will change next week.

CRU: Blackout knocks out ArcelorMittal mill ‘for months’
Truchas works in Lazaro Cadenas, Michoacan, western Mexico. Repairs may take up to six months.

Nippon Steel posts quarterly loss on cost to buy U.S. Steel
Nippon Steel earnings take hit from buy of U.S. Steel.

Atlas completes Evraz NA deal, renames firm, and hires former USS exec as CEO
Atlas Holdings has completed its acquisition of Evraz North America (Evraz NA) and its subsidiaries.

ArcelorMittal: As tariffs slow global growth, Calvert could be a bright spot
ArcelorMittal expects less demand growth across most of the markets it operates in, including the US, because of President Donald Trump’s tariffs. But the Luxembourg-based steelmaker also thinks it stands to benefit from an increasingly regionalized world thanks to investments like the new EAF at its mill in Calvert, Ala.