Steel Mills

North Star BlueScope Plans $700 Million Expansion

August 20, 2019

It’s official: North Star BlueScope in Delta, Ohio, will be getting a new EAF. Australian parent BlueScope Steel announced the expansion during its FY 2019 earnings presentation.

The $700 million investment will add a third electric arc furnace and second caster at the facility, boosting annual capacity by 850,000 metric tons (936,949 net tons). Commissioning of the new EAF is planned for late 2021 with full rampup 18 months later. The expansion will create 90 new jobs at the facility.

“North Star is recognized as a best-in-class asset. Based on long-term historical spreads, this project is expected to deliver compelling ROIC of 15 percent or more, once fully ramped up,” said CEO Mark Vassella. “Moreover, the project has future potential growth through possible debottlenecking to add a further 500,000 metric tonnes per annum of steelmaking capacity.”

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EAF production now commands 70 percent of the U.S. market, and BlueScope expects that trend to continue. North Star BlueScope mostly supplies service centers and is geographically located within 300 miles of its customers. Prime and obsolete scrap is plentiful in the region, and the mill is near to the new HBI plant under construction by Cleveland Cliffs in Toledo.

North Star is one of several U.S. steelmakers adding capacity in the next few years. Vassella said the company is not worried about future steel overcapacity in the U.S. and predicts that by 2023 supply and demand will be largely balanced in the region. Whether EAF capacity is added or blast furnace capacity is removed, North Star remains very comfortable with its cost position and outstanding quality, he added.

The expansion will be led by Pat Finan, previously Chief Executive of BlueScope Buildings. Finan will take on the new role of Chief Executive of Hot Rolled Products North America, responsible for both the North Star operations and the expansion project.

Alec Highnam, previously President of BlueScope North America, will take on the expanded role of Chief Executive of BlueScope Buildings, leading the group’s engineered steel building business in North America and taking on executive responsibility for BlueScope’s other corporate interests there, including Innovation and the BlueScope Properties Group.