Given the urgency for mine-resistant ambush-protected (MRAP) vehicles used to help shield U.S. troops from roadside bombs in Iraq and Afghanistan, steelmakers are under intense pressure to meet demand.
Armor steel plate for MRAPs, which consist of several different models but all feature a raised chassis and a V-shaped hull to help deflect the impact of explosives, comes from three producers in North America Evraz Oregon Steel Mills Inc., Portland, Ore.; Algoma Steel Inc., Sault Ste. Marie, Ontario; and ArcelorMittal, Chicago. All three have been maximizing production levels.
Scott J. Montross, vice president and general manager of Evraz Oregon Steel Mills, said his company's mill in Portland is producing about 8,000 tons of armor plate a month for military applications. "They've asked us to support the program as much as we can. It's our civic duty to do that. We're running pretty much at full tilt."
But the supply pressures will ease within a few months, Montross said in a telephone interview. "Generally these vehicle builds would be spread out over a number of years as they put them in service. But they want to get these MRAPs as fast as they can so they very much compressed the supply timeframe, which I think is creating just a very short-term issue. I think it'll be very quick where the suppliers in North America catch up."
Evraz Oregon Steel Mills has committed a large portion of its capacity to the program, which has reduced availability of its products to other customers, Montross said. "It's obviously reduced pretty significantly the amount of open order book that we have, but overall we've been able to support to some extent our local customers."
He anticipates that the initial surge of product to MRAP vehicle builders should be over by the middle of the first quarter of 2008. "Once that's done, I think all of a sudden you start getting back to the ability to have normal supply. We all have to do our duty to support our troops. It's made a temporary tightness in the overall heat-treat market. But I think it's only temporary."
An Algoma Steel spokeswoman confirmed that her company also is running at capacity for heat-treated plate and suggested a possible expansion of what it can supply in the future. "As we look to ramp up overall production from approximately 2.6 million tons per year to over 4 million tons within the next three years, we are exploring opportunities to increase production of heat treat, and indeed ballistic grades, as market conditions warrant," she said in an e-mail response to questions.
Algoma produces more than 150,000 tons of armor plate annually at its steelworks in Sault Ste. Marie. Although the spokeswoman wouldn't comment on specific customer contracts or sales volumes, she did confirm that Algoma's armor plate is used by the U.S. Armed Forces for its MRAP program as well as for a number of ballistic and blast protection applications.
An ArcelorMittal spokesman declined to comment.