NEW YORK Allegheny Technologies Inc. (ATI) expects its new hot-rolling and processing facility in Brackenridge, Pa., which will boost its ability to make ferritic stainless steels as well as longer and wider coils, will be completed by the end of the year.
The new facility will allow the company "to more fully participate in market opportunities for the wider product, the larger coils, (and make) us more efficient in producing some of the ferritic grades, the 400-series grades that, quite frankly, we have a difficult time doing on our existing 60-plus-year-old hot mill," chairman, president and chief executive officer Richard Harshman said during the companys earnings conference call.
He said the facility will open to the company a further 40 to 50 percent of the flat-rolled stainless market "that we cannot participate in today because we dont have the capability of producing the product."
The new hot mill will start up in a market environment in which the share of 400-series stainless, which uses no nickel while achieving some of the same properties as austenitic stainless grades, has grown.
"Due to less raw material cost volatility, many traditional 300-series stainless applications have moved to 400-seriesthat is, non-nickel bearing alloysover the past several years," Harshman said.
In addition to widening the companys product offerings, the facility is expected to significantly reduce lead times. "The cycle time with the continuous automated finishing line is approximately 30 minutes from hot-rolled coil to finished coil," Harshman said. "This compares to a cycle time of approximately two weeks at most conventional stainless finishing facilities in the world."
The result will be "a cost structure that generates positive income before tax for our standard stainless products, even at the historically low base prices seen in 2012," he said.
The facility, which is expected to cost between $1 billion and $1.1 billion, will undergo commissioning during the first half of 2014, with "most of the benefit" expected in 2015, according to Harshman. "We have to commission the mill for rolling every single alloy and product that we make, which (is) in the hundreds."
The Pittsburgh-based companys existing hot mill will be shut in 2015, Harshman said.