NEW YORK Severstal North America Inc. and U.S. Steel Corp. have decided to dissolve their Double Eagle Steel Coating Co. electrogalvanized steel joint venture.
The dissolution comes amid "a significant decline in the market for electrogalvanized products and a shift toward the new hot-dip coated technology," Severstal said July 15. "After a thorough review of the business trends and conditions by the board of directors, the parties mutually concluded that the economic viability of (electrogalvanized) production at Double Eagle could not be maintained."
Double Eagle was formed by Pittsburgh-based U.S. Steel and Rouge Industries Inc. in 1984. Severstal NA parent company OAO Severstal, Cherepovets, Russia, acquired Dearborn, Mich.-based Rouge Industries in 2004 (amm.com, Feb. 2, 2004).
Severstal intends to wind down electrogalvanized production at its Dearborn plant over the next 20 months and refocus efforts on the $285-million hot-dip coating line that it launched last year, Katya Pruett, Severstal NAs director of public relations and communications, told AMM, adding that the company expects to transition to hot-dip galvanized product at the plant by the first quarter of 2014.
"The plan is to replace electrogalvanized products with hot-dip galvanized products," Pruett said. "We will work with customers to transition to hot-dip galvanized products, and will also review our options to support electrogalvanized products via processing partners."
U.S. Steel manager of media relations Courtney Boone told AMM that the steelmaker "anticipates being able to serve our customers and produce (electrogalvanized) products at our other facilities," citing automotive coating lines at Great Lakes Works in Michigan and Pro-Tec Coating Co., Leipsic, Ohio.