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All hands are on deck to meet a tidal wave of demand

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If legendary broadcaster Walter Winchell were still in front of a microphone, his audience would be a great deal larger. Winchell, who opened his famed radio broadcasts in the 1930s through the early '50s with the line "Good evening Mr. and Mrs. North and South America and all the ships at sea," would be reaching a lot more ships, and global manufacturers of carbon steel plate couldn't be happier.

Global demand for carbon steel plate products has been extremely strong for more than a year, with a number of end-use markets contributing greatly to plate's overall strength. The energy and infrastructure markets have been particularly strong, built on demand from developing countries. But shipbuilding demand has been another constant, with more orders for ships from both commercial and military customers keeping demand for plate products at high levels.

In the United States, ArcelorMittal USA Inc., Chicago, is the largest producer of carbon steel plate for shipbuilding (much of it directed to the U.S. Navy's shipbuilding programs), followed by Nucor Corp., Charlotte, N.C. Evraz Claymont Steel, Claymont, Del., and SSAB North America Inc., Lisle, Ill., also manufacture carbon plate, some of which goes to the shipbuilding market.

There is considerably more plate made for shipbuilders in the Far East, where companies like Nippon Steel Corp. and JFE Steel Corp., both based in Tokyo, are leading plate producers, along with Seoul, South Korea-based Posco Ltd.

"The demand from shipbuilding is really strong," said John Ferriola, chief operating officer of Nucor. "What we are seeing happening is due to demand for raw materials. China has a great demand for raw materials—they are trying to ship in a lot of material to meet their steel demand. There are a lot of ships—cargo ships—being built right now to try to meet that demand. So we see demand from shipbuilding as very strong and we think it's going to stay strong for some time."

Both Nippon Steel and JFE Steel see the same market dynamics. Both companies say they are planning to boost output of shipbuilding plate to meet demand.

JFE Steel reportedly is looking to spend upward of $280 million to boost shipbuilding plate production by 10 percent during the next three years. More than 5 percent of JFE Steel's production increase is slated to occur in the next year, rising to about 6 million tonnes, to meet demand from shipbuilders who have orders backlogged into 2012, Reuters India reported recently. Meanwhile, Nippon Steel intends to spend $190 million to increase output of shipbuilding plate to 6 million tonnes annually by August 2009.

"People are moving goods on a more regular basis," a source at another U.S. plate producer said. "China and India need a lot of raw materials and there just are not enough ships to meet their needs. I think most of the demand is coming from overseas."

Some also is coming from the U.S. military. ArcelorMittal USA has been providing plate to the military, and Allegheny Technologies Inc. (ATI), Pittsburgh, recently unveiled a new specialty armor steel for U.S. and international defense markets (AMM, June 17).

ATI 500-MIL plate is designed to meet the new U.S. MIL-DTL-46100E high-hard specifications for ballistic performance, protecting against armor-piercing rounds while also offering good blast-resistance properties. Applications for the new plate range from medium- and heavyweight tactical vehicles to armored patrol cars, above-deck structures on ships and aboard aircraft in perforated versions.

"The market introduction of ATI 500-MIL armor steel comes at a time when demand for high-hard specialty metals is strong," said Pat Hassey, chairman, president and chief executive officer of ATI. "Lead times are long for military contractors and fabricators. ATI has the capacity to meet immediate and near-term demand, with the production capacity for future demand that the product is expected to generate."


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