BlueScope foresees expansion in its US steel capacity

A presentation for investors prepared by Australia-based BlueScope about its global operations includes several references about expanding its United States scrap-fed electric arc furnace (EAF) steelmaking operations.

In the presentation, made by Mark Vassella, the company’s managing director and CEO, and Tania Archibald, its chief financial officer, BlueScope indicates its North Star BlueScope EAF mill in Delta, Ohio, “continued to operate at 100 percent capacity” in the second half of 2018.

The presentation also states it foresees “continued strength in [U.S.] Midwest benchmark steel prices” in the first half of 2019 “supported by robust demand and [a] favorable trade environment.” Demand for steel produced at the mill is characterized as “strong across key end-use segments.”

The two corporate officers point to an “expansion option through [a] possible third electric arc furnace and second caster,” presumably in Ohio, as no other states or regions are mentioned.

The BlueScope presentation indicates such an expansion could add from 800,000 to 900,000 new metric tons of steelmaking capacity and would cost from $600 million to $700 million.

The expansion planning is underway, according to Vassella and Archibald, whose presentation slides indicate “detailed design and engineering” studies have started, and the firm is “commencing [the] final feasibility phase based on [a] rigorous capital stage gate process, with [the] final decision expected during the first half of fiscal year 2020.”

Should the green light be given, BlueScope predicts a two-to-three year construction period followed by a “two-year ramp-up thereafter.”