TORONTO Severstal North
America Inc. is mulling a potential rebuild of the idled "B"
blast furnace at its Dearborn, Mich., steel works as well as
constructing a continuous annealing line without Energy
Department funding, a company spokeswoman and union official
The facility currently operates
only its "C" blast furnace, which has an annual production
capacity of 2.1 million tons, a figure that would jump to 3.1
million tons if the "B" blast furnace were to be brought back
online, the Severstal spokeswoman said, adding that any rebuild
would depend on market conditions. "If we need more steel made
and we need another integrated furnace, then we would bring
back the B blast furnace. But that hasnt been
The "B" blast furnace in
Dearborn was shut down after molten metal breached the
furnaces shell in January 2008, spilling raw materials
and liquid metal onto the floor (AMM, Jan. 8, 2008).
The accident occurred not long after the "C" blast furnace
resumed operations following a major upgrade.
The "B" blast furnace "would
need a rebuild to be operational," the spokeswoman said, noting
that the potential project is not necessarily a near-term goal.
"I dont know if its planned for this year or
several years down the road. . . . We have one
furnace thats operating at Dearborn, and thats
enough for us right now."
The company also is considering
moving forward with previously announced plans to build a
continuous annealing line, even after the Energy Department
backtracked on plans to award the company a $730-million
conditional loan to help fund the facilitys build-out
following criticism from other steelmakers (AMM, Jan.
The company said at the time
that it would use "alternative" means of funding to complete
planned upgrades at the plant, including the continuous
But that project also faces an
uncertain timeframe, the Severstal spokeswoman said. "All I
know is there is no specific plan in place right now on when
its going to be built, if its going to be built and
how we are going to finance it."
Talk of a potential blast
furnace rebuild and the possible continuous annealing line
construction came on the heels of ratification by United Auto
Workers union members of a five-year labor agreement
(AMM, April 10).
Bernie Ricke, president of UAW
Local 600, which represents workers at both Severstals
Dearborn facility and Double Eagle Steel Coating Co., a joint
venture with Pittsburgh-based U.S. Steel Corp., told
AMM that the new contract makes reference to new
investments. "We do have a letter talking about future
investments in the contract. There are certain things that we
are looking at down the road: another blast furnace, a
continuous annealing line," he said, noting that neither
investment was directly tied to the labor contract.
"But we know that long-term to
keep us in a strong position we need another blast furnace,"
Ricke said. The same is true of the continuous annealing line,
which is "on hold right now" but a key part of Severstals
plans to expand into high-strength steel markets needed to
serve the automotive industry, he said.
With a five-year labor agreement
in place, Severstal can better focus on such long-term
investments, Ricke said. "Our main priority (in labor
negotiations) is strengthening the economic security of our
members, and the investments (Severstal) has made so far and
future investments are the key to doing that."
Severstal has invested some $1.2
billion in Dearborn over the past year$700 million for a
new pickle line tandem cold mill and about $500 million for a
new hot-dipped galvanizing line.
"Every year, weve made
some modernizations to the plant," the Severstal spokeswoman
said, noting that a "B" blast furnace rebuild or continuation
of work on the continuous annealing line would first require
board approval. "Potentially, in five years those could be
projects that Im sure they would entertain: maybe the
blast furnace, maybe the (annealing) line. Those are potential
new projects that Severstal will do. There just havent
been any commitments or announcements."