Ferrous Department

QUALITECH BREAKS GROUND FOR NEW INDIANA MINIMILL

A new start-up steel producer in the Midwest, Qualitech Steel Corp., has begun construction of its minimill plant and world headquarters building at a 140-acre site in Pittsboro, Ind., just 14 miles west of Indianapolis. The minimill will produce 500,000 tons annually of special bar-quality steel used in automotive, transportation and capital goods industries. Most of the ferrous scrap to make the steel will come from throughout the Midwest.

Qualitech also recently began construction on an iron carbide production plant in Corpus Christi, Texas. In all, the company has raised $500 million to construct the two facilities and the headquarters building. In addition, the state of Indiana provided about $12 million in training, energy and infrastructure grants.

"With its sister plant in Corpus Christi, Qualitech Steel in Pittsboro will continue the revolution in the steel industry with the lowest energy consumption and the cleanest steelmaking process in the world," said Gordon Geiger, chairman of the board and chief executive officer of Qualitech, at the ground-breaking ceremony. "The company will provide the highest quality steel for America at world competitive costs, keeping American manufacturing competitive in the world. We look forward to the day when we can go to Europe or Asia and see ‘made in America’ stamped on manufactured parts."

Prior to Qualitech, Geiger spent 10 years as the executive vice president for technology at North Star Steel, and was involved with the design of North Star Steel’s Monroe, Mich., plant. Before that he led a consortium involving Nucor Corp., U.S. Steel and Praxair in the development of a steelmaking process referred to as the "carbide-to-steel" process which converts iron carbide directly into molten steel without electrical energy consumption. Qualitech’s minimill in Pittsboro will incorporate this technology.

STEEL CAN RECYCLING TRENDS UPWARD IN JAPAN

The recycling rate of steel cans in Japan rose 4 percent to 73.8 percent in 1995, according to the Japan Iron & Steel Exporters’ Association, Tokyo. A total of 1.42 million tons of steel cans were produced in 1995, while 1.04 million tons were recycled. Of note, about 60 percent – or about 36.4 billion cans in 1995 – of all beverage cans in Japan are made of steel. Among cold drink containers, about 80 percent are made from steel.

Metal Recovery Technologies Inc., a commercial zinc recycler based in East Chicago, Ill., has leased a scrap metal shredder to meet the raw material needs of the company’s processing plant. In addition, MRT has secured an additional amount of pre-shredded scrap and estimates it will process a total of at least 10,000 tons of scrap into high quality "black scrap" and 99.8 percent pure zinc in the first quarter of this year.

The company currently has contracts to purchase 3,000 tons of scrap per month, and expects that amount to double to 6,000 tons per month by the second quarter of this year.

"The lack of available shredding capacity retarded our progress in the last quarter of 1996," says William Morgan, inventor of the zinc recycling process. "However, the addition of the shredder will help us remedy this and has had the ancillary effect of facilitating new long-term contracts with suppliers and customers. This puts us in a strong position to achieve market penetration in both the zinc and black scrap market."

MILL WASTE RECYCLING COMPLETES FINANCING

Allmet Technologies Inc., Trevose, Pa., has completed financing through Chase Securities Inc.’s Power & Environmental Group for a facility that completely recycles by-products of steel production, including electric arc furnace dust, millscale and sludges, according to Allmet officials.

"Allmet’s precedent-setting technology provides both minimills and integrated steel plants with an ‘inside-the-fence’ 100-percent recycling solution that leaves no waste by-products," says Jim Brown, a vice president with Chase.

The recycling system used by Allmet combines a rotary hearth furnace with plasma technology to process waste oxide by-products of steel production into marketable zinc, lead and salt.

GLOBAL STEEL PRODUCTION DOWN SLIGHTLY IN 1996

Provisional figures and estimates indicate that total 1996 world crude steel production was 750.4 million metric tons – 0.4 percent lower than the global production of 755.8 million tons produced in 1995, according to the International Iron and Steel Institute, Brussels, Belgium. This decrease mainly reflects reduced production in Europe and Japan that was nearly balanced by strong outputs in North and South America and Asia.

At press time, the new TRICO minimill in Decatur, Ala., is scheduled to produce its first batch of steel. The minimill, a joint venture between LTV Steel, Cleveland, and Sumitomo Metal Industries, Japan, will be capable of producing hot-rolled steel as thin as 1 mm.

The non-union minimill is part of a new wave of minimills coming online in North America that are collectively expected to add more than 11 million tons of new steel capacity.

FERROUS PRICES BOUNCE BACK, WILL BE STEADY

After a weak showing toward the end of 1996, ferrous scrap prices have bounced back, recovering lost ground. As of press time, ferrous scrap prices have gained as much as $15 a gross ton in some areas.

"The market came back very well," says one major processor in the South. "But I think that prices are topping out and will stay level through the summer."

Industry analysts are attributing the halt in any future ferrous scrap prices to the strong dollar that is making the United States market more attractive to European scrap exporters.

"We are also seeing higher imports from South America, as well," says another processor. "Collectively, what this is doing is putting a lid on ferrous scrap prices, even though new steelmaking capacity is coming online and demand is remaining very strong."

Steel Imports Up 11.4 Percent Through October 1996

In October 1996, the United States imported 2.80 million net tons of steel mill products – up 4.6 percent from the 2.68 million imported in September 1996, and up 76.8 percent from the 1.58 million net tons of steel imported in October 1995, according to the American Iron and Steel Institute, Washington, and based on a compilation of U.S. Commerce Department data.

Led by a 44.4 percent gain in European Union shipments to the U.S. in the first ten months of 1996 compared to the same period last year, the U.S. imported 23.47 million net tons of steel products through October. This is 11.4 percent higher than the 21.06 million net tons of imports in the first 10 months of last year. If imports were to continue at their current rate, the total for 1996 would be 28.2 million tons.

October imports accounted for 25.1 percent of apparent consumption, up from 16.8 percent a year earlier and slightly down from the 25.3 percent in September 1996. Year-to-date imports represented 22.6 percent of apparent consumption, up from 21.7 percent for the same period in 1995.

Of the total October 1996 imports, finished products were 2.09 million net tons, up 7.6 percent from the 1.94 million net tons imported the month before and up 59.6 percent from the 1.31 million net tons imported in October 1995. Finished steel imports represented 74.5 percent of total imports for October 1996, compared to 72.5 percent the month before and 82.6 percent in October 1995.