CHICAGO Warren Steel Holdings LLC has received approval from Ohio regulators for a lower power rate and is gearing up to restart operations Aug. 1, it said.
The discounted electric rate is on par with those already received by electric-arc furnace producers in Ohio and other states, the Warren, Ohio-based steelmaker said July 23.
A reduced rate also will allow Warren Steel to compete with out-of-state steel producers and make partnerships with other Ohio steel companies, the steelmaker said.
"We will now be able to resume operations, avoid layoffs, better compete in a highly competitive market and invest additional capital into the plant and take advantage of attractive current business opportunities," vice president John Scheel said in a statement.
The company declined to disclose the companies with which it might be looking to form partnerships or what business opportunities it might be pursuing.
Warren Steel had stopped operations in late March, largely due to high manufacturing costs as it also sought a lower power rate on an expedited basis from the Public Utilities Commission of Ohio (amm.com, June 10). The rate approved by the commission will see Warren Steel pay a target rate of $50 per megawatt hour (MWh) its first year of operation, $51 per MWh in its second year and $52.50 per MWh in the third year, according to commission documents.
The company has said it would have three primary customers once it restarts: one, an internal Optima Specialty Steel Inc. customer and two external customers with operations in Ohio. Optima Specialty Steel is a subsidiary of Miami-based Optima Acquisitions LLC, which also is the parent company of Warren Steel (amm.com, July 7).
Other potential customers, which have already told Warren Steel they would place orders, are involved in producing oil country tubular goods (OCTG) for use on the Marcellus and Utica shales, Warren Steel has said.
Warren Steel is said to have worked out a supply deal with Pittsburgh-based U.S. Steel Corp. (amm.com, March 28), which makes seamless OCTG in Lorain, Ohio.
U.S. Steel does not comment on rumor or speculation, a company spokeswoman said.
Warren Steel has a melt shop and casting facility that can produce carbon and alloy steel continuous-cast rounds, squares and rectangles for the specialty steel sector, including for energy, construction and automotive applications.