BlueScope considers expansion of Ohio steel mill

Australia-based BlueScope Steel Ltd. says it is considering expanding its North Star Steel mill, located in Delta, Ohio, thanks to what it labels a promising outlook for the North American steel sector. The steel mill is an electric arc furnace (EAF) operation with an annual capacity of 2.1 million tons per year of hot-rolled coil steel.

In an appendix to its most recent financial report, BlueScope says, “A comprehensive study has been initiated to evaluate adding between 600,000 to 900,000 metric tons per annum of steelmaking capacity [in Ohio], through the addition of a third electric arc furnace and a second caster.”

The steelmaker has given the project an initial estimated price tag of from $500 million to $700 million and adds, “The project is expected to take two or three years to develop if we proceed.” BlueScope says it expects to provide an update on the project assessment in about one year.

In BlueScope’s 2018 fiscal year, which ended June 30, the company says its North American mill generated 13 percent more sales revenue compared to the previous fiscal year and while the mill’s “underlaying EBITDA (earnings before interest, tax, depreciation and amortization)” increased by 7.5 percent compared with the year before.

The steelmaker says it sells approximately 90 percent of its Ohio mill output in the United States Midwest U.S., with its end customers consisting of “broadly 50 percent automotive, 35 percent construction, 5 five percent agricultural and 10 percent manufacturing/industrial applications.” The firm adds that the North Star mill “continues to benefit from strength in the automotive sector as well as in the construction sector.”

BlueScope also comments that “high capacity utilization rates” are in place at the mill, and “uncertainty around imports associated with Section 232 as well as improving world prices [have] helped support higher domestic [steel] prices” in the U.S.

In terms of its scrap feedstock, Waterloo, Indiana-based MetalX Inc. has been investing in a large scrap yard in Delta, across the road from the BlueScope mill.

At the November 2017 groundbreaking for that $35 million facility, MetalX President and CEO Danny Rifkin remarked of his company’s investment, “We truly appreciate the encouragement of the North Star BlueScope team,” as well as citing support from Ohio economic development officials. The new MetalX yard is scheduled to begin operating in the summer of 2018 and to be fully operational by the end of the year.