NEW YORK A second Turkish
steel producer is considering setting up a scrap recycling
facility and steel mill on the Gulf Coast, but that
doesnt mean its a sign of things to come.
Houston-based Ozkan Steel USA
LLC, the U.S. subsidiary of Turkish steel producer Ozkan Demir
Celik Sanayi AS, is in the process of identifying a final
location in southern Louisiana and expects to start the scrap
recycling facility by June this year, a company executive
M. Fehmi Nuhoglu, the
companys vice president for investments and strategic
development, also confirmed plans to build a
300,000-tonne-per-year steel plant that would cater
specifically to the shipbuilding industry. It would cost $150
Ozkan Steel USA is looking for a
50-acre site on the Mississippi River with a deepwater
Ozkan is the second Turkish
producer to announce a U.S. scrap sourcing facility in recent
months. In November, Colakoglu Metalurji AS set up a scrap
facility and finished product trading house in Houston (
amm.com, Nov. 12).
U.S. exporters were mixed on the
moves by the two steelmakers from Turkey, the largest offshore
consumer of U.S.-generated scrap.
"The U.S. is the place to be due
to cheap energy and surplus scrap. I think more companies will
come here. I would if I was them," one source said. "I am not
sure how this will impact the flows, but it will. I would say
the Turkish mills will even consider buying scrapyards in
However, Ozkans plans seem
"preliminary," another source familiar with the developments
"Many companies look at coming
into the U.S. to set up operations, but it takes time and a
tremendous amount of preparation and work to make all the
pieces come together," he said.
"It is no coincidence that
Colakoglu commenced in November and after only two months in
the market will do its first scrap cargo in February. It took a
year and a half of preparation to get set up for that result.
If any company moves too quickly and doesnt do thorough
due diligence, they can make a big mistakei.e.,
ThyssenKrupp Mobile, and several Chinese projects that never
got off the ground," the second source added.
A third source questioned
Ozkans choice of location.
"I agree that it is an advantage
to be on the water, but not for the same reason they are
saying. Louisiana is not a scrap-rich area. There is a lot of
competition on the lower Mississippi for scrap," he said.
"They would be better off to
locate their plant farther north into the scrap-rich areas of
the Midwest/Ohio Valley. I would rather be on the river there
than in Louisiana, since they would be able to be competitive
via barge and have local supplies of scrap by truck and
carload," he added.
But its unlikely that the
announced investments offer early signs of a rising trend, a
fourth exporter said.
"I dont think it is an
emerging trend; 300,000 tonnes per year is very small. It is a
micro-mill. They must think they can make money at this niche
marketshipbuilding. As far as a trend by Turks, I
dont think this is a trend," he said.