Metals

ArcelorMittal, Nippon Steel to build EAF at Alabama rolling mill

Luxembourg-based ArcelorMittal (AM) has signed a definitive agreement with Japan-based Nippon Steel Corp. (NS) to build an electric arc furnace (EAF) at the AM/NS Calvert, Alabama, rolling mill complex. The EAF will be capable of producing 1.5 million tons of steel slabs for the adjacent hot-strip mill and will be able to produce a spectrum of steel grades required for Calvert’s end-use markets.

AM announced plans to build an EAF at AM/NS Calvert in August of last year. According to a news release from AM, the EAF will be a 50/50 joint venture between the two companies.

AM says construction of the new EAF capacity, which will cost about $775 million, will start in 2021, with the EAF coming online in the first half of 2023. AM/NS Calvert is funding the project.

“This is an important project for AM/NS Calvert, which builds additional flexibility to its slab sourcing and will increase its responsiveness to short-lead-time orders,” says Brad Davey, CEO of ArcelorMittal North America. “AM/NS Calvert is already one of the world’s finest steel finishing facilities. Adding this state-of-the-art EAF will further strengthen its capabilities and enhance its ability to serve its full range of customers.”

NS says in a news release that the Calvert complex currently produces steel sheet products by processing semifinished slabs procured from domestic and overseas suppliers. With the new EAF, Calvert will be able to manufacture a portion of the slabs necessary to produce its steel sheet products. NS says the EAF will produce slabs for automotive flat products, including Gen3 advanced high-tensile steel sheets.

BIR issues China ferrous scrap import changes memo

The Bureau of International Recycling (BIR), Brussels, has distributed to its members a memo from five People’s Republic of China government agencies concerning regulatory changes affecting imported ferrous scrap.

The memo, titled “Announcement on Regulating the Import Management of Recycling Iron and Steel Raw Materials No. 78 of 2020,” is from China’s Ministry of Ecology and Environment and four other agencies with scrap import oversight: the Development and Reform Commission, the General Administration of Customs, the Ministry of Commerce and the Ministry of Industry and Information Technology.

The Dec. 30, 2020, memo informs regulators, port officials and the metals industry that “recycling iron and steel raw materials that meet the standards of recycling iron and steel raw materials (GB/T39733-2020) are not solid waste and can be imported freely.”

The agencies add, “Imports are prohibited if they do not meet the requirements of the national standards for recycling iron and steel raw materials (GB/T39733-2020)” and state that the new policy went into effect Jan. 1.

For scrap traders and processors interested in exporting to China who also handle nonferrous, the new system appears comparable to one that came into effect Nov. 1, 2020, for aluminum and copper scrap grades that were redefined by the government as a resource.

Metalico purchases Ohio shredder yard

Cranford, New Jersey-based Metalico Inc. has purchased an auto shredder yard in northeast Ohio from the Liberty Iron & Metal subsidiary of Hong Kong-based Chiho Environmental Group. A recap of the transaction prepared by Chiho for the Hong Kong Exchanges and Clearing Ltd. and The Stock Exchange of Hong Kong Ltd. says the sale was completed Dec. 25, 2020, for $13.2 million. Chiho stock is listed on the Hong Kong Stock Exchange, triggering the disclosure.

The recap states, “The seller is Liberty Iron & Metal Inc., an indirectly wholly owned subsidiary of [Chiho]. The buyers are Chloe Girard LLC (Metalico Girard) and Metalico Youngstown Inc. (Metalico Youngstown). The buyers are part of Ye Chiu Metal Recycling (China) Ltd., listed on the Shanghai Stock Exchange [and] one of the largest secondary aluminum producers globally.”

The purchased yard in Girard, which is near Youngstown, Ohio, had been part of the Diamond-family-owned Liberty Iron & Metal before it was purchased in part by the Germany-based Scholz Group in 2007 and in its entirety by Scholz in 2016. Scholz Group was purchased by Chiho in 2016. According to Chiho’s December 2020 transaction summary, “The proceeds from the sale will be primarily used to repay existing local bilateral bank loans secured over the [disposed of] assets, hence reducing loans and financial expenses.”

Chiho’s recap indicates additional Chiho disinvestment could be in the works. The company says it plans to “strategically refocus” on its Southwest U.S. operations and divest the disposed of assets. Those assets include certain properties, equipment and inventory of the shredder facility that the company owns and operates in Ohio and Pennsylvania. After the divestment, the company says it will cease to own and operate the Girard shredder facility.

In addition to the sold Girard shredder yard, Liberty’s website lists a shredder yard in Erie, Pennsylvania, and another facility in Sharon, Pennsylvania, as its remaining eastern U.S. assets. In the Southwest, Liberty has a shredder yard in Phoenix and a location in Chihuahua, Mexico.

Equity firm purchases Hussey Copper

Leetsdale, Pennsylvania-based Hussey Copper has been purchased out of bankruptcy by an affiliate of New York-based KPS Capital Partners LP. Hussey, which melts copper scrap at its Leetsdale facility, was purchased as part of Libertas Copper LLC from Zohar III Ltd., with the approval of the United States Bankruptcy Court for the District of Delaware.

Hussey describes itself as a leading North American processor and fabricator of copper products and the largest North American manufacturer of copper bus bar. A Leadership in Energy and Environmental Design (LEED) qualifying statement posted to Hussey’s website states, “Hussey Copper architectural copper sheet and strip is manufactured with a minimum of 95 percent recycled content.” The company says it uses internal scrap and scrap obtained by “prequalified industrial sources [and] scrap metal suppliers.”

According to KPS, Hussey Copper is the third acquisition completed by its KPS Special Situations Mid-Cap Fund.

Ryan Harrison, a partner of KPS Mid-Cap Investments, says Hussey Copper is “a market leader with best-in-class manufacturing capabilities, product offering, quality and customer service.

He adds, “We look forward to working with CEO John Harrington, Hussey Copper’s management team and employees to build on this great platform. Hussey Copper’s strong brand and manufacturing expertise, combined with access to KPS’ strategic, operational and financial resources, provide an ideal foundation for future growth. We intend to drive the company’s growth both organically and through strategic acquisitions.”

Harrington says, “The entire Hussey Copper team is excited to partner with KPS in this next phase of growth. KPS’ tremendous track record of manufacturing excellence and investing in leading metals companies will position Hussey Copper for continued success over the long-term. We plan to work closely with KPS to develop a range of growth and operational initiatives to build upon our long and successful history.”

According to Hussey, Locke Lord LLP served as legal counsel to KPS and its affiliates with respect to the transaction, while Lazard Middle Market LLC served as a financial advisor and Latham & Watkins LLP served as a legal counsel to Hussey Copper.

In addition to its Leetsdale facility, which has a melt shop, Hussey operates a bar mill and a fabrication plant in Eminence, Kentucky.

KPS describes itself as the manager of a family of investment funds with more than $12 billion in assets. Other KPS portfolio companies include engine maker Briggs & Stratton and golf club manufacturer TaylorMade.