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Evraz plans $32M Pueblo rail mill expansion

Keywords: Tags  Evraz North America, rail mill, Alexander Frolov, steel, rail, tubulars, Giacomo Baizini, Pueblo Thorsten Schier

NEW YORK — Evraz Plc is planning a $32-million investment at its Pueblo, Colo., rail mill to boost output by 10.5 percent to 580,000 tonnes annually.

"We are now making some investment in Pueblo, which should give us (a) material increase in production," Alexander Frolov, chief executive officer of the London-based company, which owns Evraz Inc. North America, Chicago, said during an April 11 conference call to discuss the steelmaker’s 2012 results. Production at Pueblo is expected to be around 500,000 tonnes this year, "with (a) further increase in 2014."

The expansion will be completed by the third quarter, according to a company presentation.

A previously announced heat-treat capacity expansion at the steelmaker’s Calgary, Alberta, pipe and tube mill (, Jan. 25) is expected to be completed in the fourth quarter at a cost of about $64 million, according to the presentation.

Steelmaking utilization rates at Evraz’s North American operations remain high, much like in 2012, the company said. "Utilization is close to 100 percent. We produce as much as we can," Frolov said.

"On the rolling side, it’s also close to 100 percent, though some pipe-making facilities are not fully utilized," Frolov said in response to a question about North American capacity utilization, noting that the company’s pipe-making utilization rate was still "above 80 percent."

The company is "neutral" on pricing and "maybe positive" on volumes for its North American operations this year, Frolov said.

Revenue for the company’s North American steel segment totaled $3.05 billion last year, down 4.5 percent from $3.2 billion in 2011, with per-tonne revenue declining for all products except tubulars, according to the presentation. The company saw "positive price dynamics for high-value tubular goods," chief financial officer Giacomo Baizini said during the call. Evraz North America’s crude steel production rose 3.9 percent last year to 2.42 million tonnes, although prices for most products fell (, Jan. 18).

The company is guarded on the outlook for its global steel operations. "2012 was a year characterized by challenges, and we are therefore cautious about near-term developments," Frolov said, with steel production levels across the company’s operations expected to be roughly flat compared with 2012, when it produced 15.9 million tonnes.

Evraz posted a 2012 net loss of $335 million, down from $453 million the previous year on revenue that dipped 10.2 percent to $14.73 billion.

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