NEW YORK U.S.
Steel Corp. is said to have recently delivered steel slabs into
ThyssenKrupp AGs Calvert, Ala., mill for rolling,
according to three sources familiar with the matter, fueling
speculation that a raw material supply agreement could be in
the works after the southern mills imminent sale.
Sources indicated that
the slabs, which were likely brought in from U.S. Steels
Fairfield, Ala., facility, are going to be tested to make
American Petroleum Institute (API)-grade coils for the pipe and
tube market, as well as extra wide hot-rolled coils.
located some 200 miles southwest of ThyssenKrupps Calvert
facility, has a slab capacity of 1.9 million tons per year,
according to the Association for Iron and Steel
Technologys 2012 iron and steel plants directory. While
U.S. Steel can make slabs up to 100 inches wide, its hot strip
mill can only produce 24- to 60-inch wide product.
ThyssenKrupps Calvert hot strip mill can product
73.6-inch wide material, according to the directory.
A spokeswoman for
Pittsburgh-based U.S. Steel Corp. declined to comment.
USA has not rolled and currently has no plans to roll any (U.S.
Steel) slabs," a spokesman for ThyssenKrupps U.S. arm
said via e-mail Nov. 4, but couldnt be reached for
additional comment. ThyssenKrupp sales representatives are said
to have told customers of the recent move.
"My understanding is
that theyre going to send slabs to (ThyssenKrupp), roll
them and then send the product back north to its customer
base," one source in the South said. "That could be a lot of
money in freight. Im kind of raising my eyebrow."
Testing slabs to make
API-grade coil would be logical, market participants said,
particularly because U.S. Steel is focused so heavily in the
energy space. While much of the conversation over ThyssenKrupp
has remained on its ability to feed into the automotive space,
sources indicated that the energy space is also a strong end
market for steel.
access to making wider hot-rolled bands would also be
beneficial for U.S. Steel, as it can offer more options for its
The move by U.S. Steel
could mean that a supply agreement is in the works, speculators
stressed. They indicate that Fairfields existing hot
strip mill needs to be upgraded, so moving some slabs over to
ThyssenKrupp while the hot strip mill is idled could be a
strategic move for the producer.
concerning the imminent sale of ThyssenKrupps Calvert
facility started to circulate in late October, with many
players expecting the deal to help tighten supply and increase
pricing in the Southeast.
that an announcement from the Essen, Germany-based steelmaker
or from the likely joint buyersLuxembourg-based
ArcelorMittal SA and Tokyo-based Nippon Steel & Sumitomo
Metal Corp.could be seen in the coming days
(amm.com, Oct. 29).
supplying raw material and other factors have caused Cia.
Siderúrgica Nacional SA, the other named bidder, to fall
behind, sources familiar with the situation have indicated.