BlueScope cites US growth as critical strategy

Australia-based steel producer BlueScope has reported fiscal year 2022 net profits after tax of AUD$2.81 billion ($1.97 billion), which its CEO calls “a record performance in BlueScope’s 20-year history as a listed company.” The company also disclosed it has recently purchased a scrap yard in Ohio for about $80 million. Milliron Recycling, Mansfield, Ohio, was owned and operated by Grant Milliron.

According to a statement from BlueScope to Recycling Today, the Milliron acquisition provides the company supply surety for a large portion of key feed product for its North Star minimill in Delta, Ohio. BlueScope says Milliron also has a presence and expertise in both prime and obsolete scrap processing, which helps the steelmaker increase its participation in the circular economy.

The company says this acquisition enables the North Star facility to improve the quality and quantity of obsolete scrap it uses and reduce the mix of more costly prime scrap. BlueScope says this acquisition also will help the company to achieve additional scrap self-sufficiency.

BlueScope Managing Director and CEO Mark Vassella says the annual profits represent a 135 percent ($1.14 billion) increase compared with profits in fiscal year 2021. “This was an outstanding result, with tremendous performances across our business portfolio,” he says.

Vassella continues, “We saw continued strong demand for our steel products and solutions despite recent macroeconomic and geopolitical volatility. It’s truly heartening to see our people continue to step up, to serve our customers and to operate safely and with great resilience. This record result is their record result.”

Commenting on high-profile activity in the United States, Vassella says, “Operating cash flow, after capital expenditure, including on the North Star expansion, was AUD$1.71 billion ($1.2 billion). From this, investments of AUD$1 billion ($700 million) were made in the U.S. acquiring the MetalX ferrous recycling business and the Coil Coatings business. These were well-considered and well-executed investments in our U.S. growth plan.”

In its report to shareholders, BlueScope calls its recently completed fiscal year, which ended June 30, “a year of major achievement and progress for BlueScope in the U.S.”

The firm continues, “Construction is substantially complete on our biggest single capital project, to add capacity of 850,000 metric tons per annum to the North Star minimill in Delta [Ohio]. The first coil was produced in June 2022, and we are commencing the 18-month ramp up to full run rate, at which point North Star will account for around 5 percent of total annual U.S. flat steelmaking production.”

Regarding its entry into the scrap market, the company writes, “In December, BlueScope established BlueScope Recycling and Materials, or BRM, by acquiring the ferrous scrap steel recycling business of MetalX in Waterloo, Indiana, and in Delta, Ohio, for approximately $220 million.”

Referring to its most-recent acquisition, without details provided, BlueScope writes, “In August, a third scrap processing site was acquired.” A slide accompanying the BlueScope fiscal year 2022 presentation refers to the “recent acquisition of an additional scrap processing site in Ohio for about US$80 million.” The new (former Milliron) site is not yet listed on the BRM website as of Aug. 16.

In its report to shareholders, BlueScope adds, “BRM gives us a crucial presence and expertise in scrap processing. The new business unit will enable North Star to improve the quality and quantity of obsolete scrap it uses and reduce the mix of higher cost, prime scrap.”

On the finished steel downstream side, the company adds, “In June, BlueScope established a significant national painting footprint in the U.S. with the $717 million acquisition of the Coil Coatings business from Cornerstone Building Brands [which is] now named BlueScope Coated Products, or BCP.”