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
Hyundai still on for Louisiana steel mill despite US raid at Georgia battery plant
Hyundai has reaffirmed its commitment to build a steel plant in Louisiana following a US government immigration raid at its battery facility in Georgia.
Hybar lowers output forecast, owning up to EAF startup delay
Hybar LLC’s rebar mill in Osceola, Ark., is now melting scrap and will soon be fulfilling orders, according to CEO David Stickler, despite a six-to-eight-week delay caused by commissioning the world’s first Aura electrical system.
Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.
AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.
USW seeks clarity on USS plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.