CHICAGO U.S. Steel Corp.
is now self-sufficient when it comes to its North American coke
requirements, the companys top executive says.
The Pittsburgh-based steelmaker
recently started up its new "C" coke battery in Clairton, Pa.,
and one of two Carbonyx units at its operations in Gary, Ind.,
chairman and chief executive officer John P. Surma said during
a conference call with analysts Jan. 29.
"We now have the ability to
produce all the coke we need in North America," Surma said.
The increased capability also
allows U.S. Steel to adjust blends of coke, injection coal and
natural gas for each of its blast furnaces, thereby keeping
carbon costs as low as possible, Surma said. In addition, the
move eliminates the companys need to buy coke on the
merchant market, which often is of lower quality.
Being self-sufficient in its
coke requirements should give U.S. Steel the increased ability
"to invest in other potentially high-return projects in the
future," Surma said.
U.S. Steel expects capital
expenditures to total about $800 million in 2013, investor
relations manager Dan Lesnak said during the conference
Surma and chief financial
officer Gretchen Haggerty said much of that spending is
carryover from work at Gary and Clairton, as well as planned
maintenance, including some blast furnace work. Surma said the
company had no "single nameplate project" currently on its
plate, although it might spend more on mining equipment in 2013
than in past years.
U.S. Steel previously said it
started one of two Carbonyx modules at its Gary Works in the
third quarter of 2012 and that it expects to start up the
second in the third quarter of 2013. The two modules are
expected to provide some 500,000 tons of a carbon-alloy coke
substitute annually once they reach full production.
The company had also said that
Clairtons "C" battery is expected to gradually ramp up
production to slightly less than 1 million tons per year by the
first quarter (
amm.com, Oct. 31).
Also nearing completion is U.S.
Steels new continuous annealing line at its Pro-Tec
Coating Co. finishing facility, a joint venture with
Japans Kobe Steel Ltd. in Leipsic, Ohio. "We are making
good progress. ... We are doing cold commissioning now," Surma
said. A coil is expected to run through the system sometime in
the next month or two, with product being made in the
Surma said the lines
high-strength steel would allow the company to provide
automakers with the manufacturing benefits of steel as well as
a lighter weight and a lower price compared to other
One project that does not appear
to be progressing with urgency is U.S. Steels expansion
of its Keetac Mine in Minnesota, for which it has received the
necessary permits (
amm.com, Jan. 31, 2012).
"The Keetac expansion is
certainly a possibility ... but its a big project for
us," Surma said, citing an uncertain economy and differing iron
ore outlooks as reasons for caution. "Were taking our
time to think that one through," he added, noting that "the
resource is still there; its not going anywhere."
Keetac expansion plans have
prompted questions from analysts in the past about whether U.S.
Steel might be considering a direct-reduced iron (DRI)
Surma said DRI remained
attractive but cautioned against too much excitement.
"Its very good technology, and its got a really
good place in North America because of our energy position. ...
But for a project of that magnitude, just given our capital
position, weve been very cautious."