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Chicago flooding creates headaches

Keywords: Tags  Chicago, flooding, ferrous scrap, stainless scrap, TMK-Ipsco, ArcelorMittal USA, Reliance Steel & Aluminum, Thorsten Schier

NEW YORK — Torrential rains in and around Chicago caused highway closures and headaches for some area metals companies toward the end of this week, although most reported minimal lasting impact.

Multiple roads were shut down in suburbs of Chicago, including Downers Grove, Ill., home of TMK-Ipsco, a subsidiary of Moscow-based OAO TMK. The company had closed its facilities in the area for the day, a spokesman said April 18, noting that the closures were "administrative only" and not expected to affect operations.

Meanwhile, a Chicago-area steel producer has asked some suppliers to temporarily hold truck shipments of scrap into one of its mills due to flooding, according to one area scrap broker. Shipping to the mill is expected to resume April 24, the broker said.

Some scrap sources in the area reported slight disruptions to their operations, but no yards were reported closed and the majority of players surveyed reported no impact.

"(It is) extremely intense and (there are) problems all around, but (we are) operating as ‘normally’ as one can during a flood," one stainless scrap processor said. "Loads are coming and going. Drivers are soaked."

"Streets and underpasses (are) flooded, reducing inbound flow truck traffic (in the) short term," a source at a large ferrous scrap company added. However, the company "(doesn’t) expect to be hindered more than 48 hours," the source said.

Some market players said they expect flooding to cause a short-term slowdown in scrap flows, though any longer-term impact is still unclear. "(It) all depends on the duration," a Chicago-based ferrous scrap supplier said. "If the rain stops today, there probably will be little to no effect."

Los Angeles-based Reliance Steel & Aluminum Co. was "not seeing any issues" at its Chicago-area operations, according to chairman and chief executive officer David Hannah. "Apparently, everything is up and running," he told AMM. However, he noted that some employees were unable to get to work due to washed-out roads, while the home basements of others had been flooded and needed to be pumped out.

"The inclement weather in Northwest Indiana has had no significant impact on our operations or our ability to serve our customers," a spokeswoman for Chicago-based ArcelorMittal USA LLC told AMM in an e-mail.

Sean Davidson and Catherine Ngai, New York, and Frank Haflich, Los Angeles, contributed to this story.

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