CHICAGO Republic Steel
expects to start a new melt shop in Lorain, Ohio, during the
third quarter, allowing the company to adequately supply its
special bar quality (SBQ) mills and run them more
Republic has faced an internal
shortage of raw materials for its Lorain and Lackawanna, N.Y.,
bar mills since its blast furnace was idled in 2008
(amm.com, Dec. 3, 2008). That has led to staggered,
temporary work force reductions in Lorain, particularly in
recent months, when bar demand pulled back.
"We are in the process of
installing a new electric furnace in Lorain," Republic
executive vice president Ted Thielens told AMM April
1. "We completed the foundation and concrete work and equipment
is starting to arrive for installation."
However, until the melt shop is
running, Republic remains in a "steel-short situation,
dependent on the melt shop in Canton," he said. "We are not
able to operate all three bar mills on a continuous basis, so
at Lorain we run the bar mills two to three weeks per
Lorain has one mill that
produces coils of up to 1-inch diameter hot-rolled bar, and a
second that makes 3- to 6.5-inch diameter hot-rolled bar. The
Lackawanna mill produces up to 3-inch diameter bar, shipped
primarily to automotive customers.
"That has been busier than the
two mills in Lorain, and we run that mill heavier," Thielens
said. "This year, were running each of the Lorain mills
two weeks a month. ... We will be on that schedule until the
melt shop starts up, and then well be able to increase
production on the bar mills."
As the bar mills are typically
on two weeks and off two weeks, this has meant temporary
layoffs during the off weeks. Up to 200 production workers are
affected each month, Thielens said, but noted that other
departmentssuch as billet inspection and
"We certainly look forward to
the additional capacity coming online with the new melt shop,"
he said, acknowledging that the Canton, Ohio-based company has
"missed some opportunities in the market" because of its
insufficient steel production.
The Lorain melt shop will allow
Republic to produce and sell bar, coil and semifinished
billets, Thielens said.
"We had a very slow second half
in 2012, but we have seen a steady improvement in incoming
orders. That is encouraging; a positive indication for the
future, when we will need added steel production," he said.
Dan Voorhees, president of
United Steelworkers union Local 1104, couldnt be reached
for comment on the pattern of temporary layoffs or the progress
of the melt shop construction.