NEW YORK Keywell LLC has hired an investment banker to pursue partners, financing or equity contributions as the company also suspended payments at all of its yards for scrap deliveries received on or before June 26.
The stainless and specialty steel scrap company confirmed to AMM earlier this week that it had temporarily closed processing facilities in Detroit, Atlanta and Chicago due to continued weakness in scrap demand (amm.com, July 1).
The company has subsequently revealed in a letter to suppliers that it will reduce staff at its operating facilities in West Mifflin, Pa.; Frewsburg, N.Y.; Falconer, N.Y.; Monroe, N.C.; Indian Trail, N.C.; Fairless Hills, Pa.; and Carson, Calif.
"While payments for receipts prior to June 26 are currently suspended, our bank (Bank of America Corp.) is supportive and cooperating with us, we have availability on our credit line with BofA and we expect that payments for all receipts on or after June 26 will be made according to terms. Any new purchases will also be handled in this manner," Keywell president and chief executive officer Mark Lozier said in the letter.
Chicago-based Lozier was "reacting swiftly to the recently announced reduction of chrome/nickel melting at AK Steel (Corp.)s Butler Works and the ongoing effects of the unprecedented downturn in the worldwide stainless steel scrap market," it said.
However, a spokesman for West Chester, Ohio-based AK Steel denied that the company had reduced its nickel/chrome melting or made any such announcement. "The plant continues to operate according to its production schedule," he told AMM.
Keywells actions "are being taken to enable the company to weather the current economic environment and prepare it for the opportunities ahead," Lozier said in the letter. "Keywell remains committed to its customers, supply partners and employees and is taking these difficult steps in an effort to position itself for growth when the market recovers."
Demand for stainless scrap has fallen sharply in recent months, along with pricing, sources have saida trend that has been exacerbated by the traditional summer slowdown in business activity (amm.com, June 18).