NEW YORK The domestic
stainless market might see little immediate impact from the
start-up of ThyssenKrupp Stainless USA Inc.s melt shop at
its Calvert, Ala., facility, although at full capacity it is
expected to put pressure on the domestic stainless market,
sources told AMM.
"Congratulations to them, but I
dont think it changes the dynamics in the marketplace (in
the short run)," one analyst said, adding that with the company
having already been cold-rolling material at the facility since
late 2010, its market behavior was unlikely to change
dramatically. "They could have done that (grow market share
aggressively) last year or this year."
Sources said it would likely
take a while for the melt shop, which has the capacity to make
900,000 tonnes per year, to ramp up.
"It will take most of 2013 until
they can reach any kind of capacity," the analyst said, adding
that reaching full production could take two years.
A company spokeswoman
didnt respond to a request for comment on how much
production the company is targeting for next year.
With the start-up, the company
will switch to producing its own feedstock rather than relying
on slabs shipped from its European operations.
"They can fill up 50 to 60
percent of the melt shop with existing business," the analyst
The company has previously
stated that about 340,000 tonnes of the melt shops
production will go to Mexican subsidiary ThyssenKrupp Mexinox
SA de CV in San Luis Potosi, while 525,000 tonnes will be
processed in Calvert (
amm.com, Dec. 10, 2010).
Once the companys internal
needs are fulfilled, any extra capacity brought to market will
pressure the domestic industry, sources said.
"My opinions been the same
the whole timefrankly, that I think its not a good
idea for the market as a whole to be built. But now that
its built, its a very high-quality operation and
theyre going to give the existing mills here a run for
their money," one Midwest service center source said. "Now it
will supplant some of the imports, but it has much more
capacity than is being imported."
A competitive advantage for the
facility will be its 72-inch-wide caster and 74-inch
cold-rolling mill, which can make coils up to 72 inches
"For some people, their wide
caster and wide coils will be very nice," the Midwest source
The ramp-up of the facility will
largely fall under Finnish stainless producer Outokumpu Oyj
following its proposed merger with ThyssenKrupp AG stainless
arm Inoxum Group, of which ThyssenKrupp Stainless is a
"Maybe Outokumpu says,
Were not going to be that aggressive, "
the analyst said, citing ThyssenKrupps previously stated
goal of getting 25 percent of the domestic stainless market by