Steel Mills

AM/NS Calvert, Outokumpu extend tolling arrangement

Written by Laura Miller

AM/NS Calvert will continue providing hot-rolling tolling services for Outokumpu.

The two companies signed a long-term tolling extension agreement, which is good through Oct. 1, 2051. The earliest effective termination date is Oct. 1, 2042, and would require four years prior written notice, Outokumpu said in a statement.

Outokumpu is a stainless flat steel producer based in Helsinki, Finland. It operates a minimill in Calvert, Ala., which is also where AM/NS Calvert’s carbon flat-rolled mill is located.

The hot-rolling agreement between the two steelmakers is a legacy of Outokumpu’s acquisition of ThyssenKrupp’s stainless steel division, Inoxum, in 2012. As part of the deal, Outokumpu acquired a melt shop and cold rolling operations in Calvert, while hot rolling services continued to be sourced externally.

In August, Outokumpu announced it would be exploring its options to strengthen its presence in the US market, including the possibility of adding its own hot rolling mill.

“We have been carefully assessing how to best arrange our operations in the US to achieve our commercial ambitions in the North American market, and the extension to the existing tolling agreement is a capital-efficient solution,” Outokumpu CEO Heikki Malinen said.

“Building our own hot-rolling mill would have been a significant investment, at least one billion dollars,” he added, noting that the tolling agreement was the best option to allow the company to grow faster in North America.

“As we have extended the hot-rolling contract, we can now shift our focus more towards the evaluation of a possible cold-rolling capacity expansion, which would enable us to directly increase our cold-rolled deliveries and grow in North America,” Malinen said.

Laura Miller

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