NEW YORK The sale of
portions of the cold mill at the former RG Steel LLC Sparrows
Point, Md., complex could signal the end of steelmaking at the
site forever, market sources say, noting that few buyers will
be interested in the integrated site with the state-of-the-art
cold mill no longer part of the package.
Late Wednesday, Nucor Corp.
president and chief operating officer John Ferriola told
AMM the Charlotte, N.C.-based steelmaker had acquired
portions of the Sparrows Point cold mill to use for upgrades
and spare parts at its existing mills but had not purchased the
full complex or any land (
amm.com, Dec. 12).
"For Nucor, its a great
investment, and thats that," one East Coast distributor
said of the deal.
The cold mill has been
highlighted as one of the most attractive parts of the
facility, with one market source describing it Thursday as the
"heart" of Sparrows Point. As a result, market participants
said it was now hard to envision a viable buyer for the
"Its difficult once you
take the cold mill out of the equation," Joe Rosel, president
of United Steelworkers union Local 9477, told AMM when
asked if the other Sparrows Point assets would likely be
operated. "I dont think its impossible, but
Charles Bradford, president of
New York-based Bradford Research Inc., agreed. "This was the
asset there it made any sense to operate," he said.
Among the available assets are a
sinter plant, a blast furnace with pulverized coal injection,
two basic oxygen furnaces, two straight-mold continuous
casters, one hot strip mill, two active hot-dip galvanizing
lines, a temper/tension mill and a self-contained tin mill
operation, according to a list posted on auctioneer Hilco
Trading LLCs website.
The auction firm, which had
joined with Environmental Liability Transfer Inc. over the
summer to purchase the Sparrows Point complex and land during
RG Steels bankruptcy auction, put the facility back up
for sale in September. An auction had been set for Jan. 3, but
Hilco canceled that auction earlier this week, saying the rest
of the production assets would be sold on a private treaty
One of the problems with finding
an operator for the site is the size of the blast furnace,
sources said. The blast furnace in Sparrows Point has a
11,000-ton-per-day capacity, and without a natural outlet for
the output in the form of an in-house cold mill, it becomes
difficult to run a furnace that size, sources said.
"You can run the primary side of
the hot mill, (but) Im not saying its likely with
the cold mill out of the equation," Rosel said.
"Sparrows isnt going to
make steel anymore," one Southern service center source
speculated, noting that the removal of the cold mill asset from
the whole complex makes pushing downstream difficult for any
operator. "Thats gotta be the death knell."
Meanwhile, customers have said
that at least three other large flat-rolled producers have been
able to serve the Northeast and Southern regions of the country
previously supplied by RG Steel out of Sparrows Point in the
months since it shuttered its operations due to its bankruptcy
amm.com, May 31).
Rosel estimated that about 1,500
to 1,600 unionized employees and 300 to 400 managers from the
Sparrows Point facility would be affected by a permanent