Steelmakers Eye Ohio

Two European-based investment groups are considering building new steel mills in Ohio.

The Russian firm MMK (Magnitogorsk Iron & Steel Works) is considering a site in southern Ohio for a scrap-fed electric arc furnace (EAF) mill. Speculation has also surfaced that MMK may instead make a bid for Middletown, Ohio-based AK Steel

At the same time MMK ponders its options, a Cleveland-based investment group that is working in cooperation with European steel industry veterans is also exploring locations in the Buckeye State for an EAF mill.

According to a report in the Columbus Dispatch, Global Principal Partners is a Cleveland-based investment group representing “steel industry managers primarily from Europe.” Ohio is not necessarily the sole target location, as the group “is considering several Midwestern states and one in the South,” according to the news report.

The proposed EAF mill would cost $1.2 billion to build and would employ about 500 people, according to a spokesperson for Global Principal Partners quoted in the Dispatch story.

The investment group is focusing on selecting a site by the end of the first quarter of 2008. The proposed mill will produce what the spokesperson described as steel for the “infrastructure market,” which could be either rebar or beam and plate grades, although a report in the Plain Dealer of Cleveland referred to the mill as one that will produce flat-roll products.

The MMK project, first announced in September, also caries a $1 billion price tag, according to news reports. The Russian firm is further along in its plans, having filed environmental permit applications for one location in southern Ohio as well as another one in Quebec.

Grades of steel produced at the MMK mill will reportedly be targeted for sale to the automotive industry.

Reports began surfacing in American Metal Market and other publications in late October that rather than build at a greenfield site in Ohio, MMK may make a bid for AK Steel, which has mills in Ohio and bordering states. MMK has been denying those rumors.