Buyers mixed on restart of Severstal coating line

Dec 23, 2009 | 10:47 AM | Corinna Petry

Some buyers of cold-rolled coated steel sheet reacted with skepticism this week upon learning that Severstal North America Inc. would restart its coating line in Martins Ferry, Ohio.

Several sources called the facility antiquated, high cost and said the current demand rate for coated sheet—believed the result of a temporary increase in automotive-related orders—is not sustainable. Others said they have seen supply shrink and demand improve, justifying Severstal's decision.

"First, the demand that built up was driven by automotive to restock and resupply. All the mills we talk to are still running at about 60 percent of capacity," the president of an Ohio Valley flat-roll distributor said. "(Second), a place like Heartland Steel in Terre Haute (Ind.) could fire up and produce a lot more efficiently and quickly than Severstal Martins Ferry," although other producers "are afraid to do more."

Why? "As the mills produce more and more automotive sheet, the demand from HVAC (heating, ventilation and air conditioning) and other construction products continues to dwindle and is still very weak. The general economy is not booming yet so they are walking a fine line with regard to replenishing inventory until the time the (demand) tap shuts down again," he said.....