Steel Mills
Stelco at Full Capacity in Q1 Despite Pandemic
Written by Sandy Williams
May 7, 2020
Canadian steelmaker Stelco sold out its mill and shipped to capacity despite the coronavirus pandemic in the first quarter of 2020. CEO Alan Kestenbaum attributes a higher value mix, excellent service to customers and a tremendously loyal customer base for its ability to fill order books when competitors are struggling. The company shipped 621,000 net tons of steel during the quarter.
“We reached 150,000 tons or an annualized run rate of close to 600,000 net tons of value-added cold-rolled and coated shipments. With our order book approximately 85 percent filled for the second quarter, we are hopeful to be able to ship to capacity yet again for this current quarter despite the uncertainty resulting from the pandemic,” said Kestenbaum.
Stelco began preparing for the crisis after first hearing about the virus infection rate in China. “We saw the crisis coming and saw it hit China. When China gets sick it is not good for the metals business,” said Kestenbaum. “We had no idea it would hit North America the way it did.” Decisions to aggressively solicit business, price hedging and controlling purchasing costs helped the company to weather deteriorating conditions in the first quarter.
Stelco’s revenue in the first quarter fell 14 percent to CAD $445 million from Q1 2019, but increased 2.0 percent from the prior quarter. Average selling price per ton was up 7 percent from Q4 but declined 14 percent from a year ago due to lower market prices for flat steel products. Shipping volumes increased due to higher coated and cold rolled steel product shipments, which were partly offset by lower hot rolled coil shipments. The company reported a net loss of CAD $24 million for the quarter.
Stelco is moving forward with an upgrade and reline of its blast furnace and, barring recruitment and safety issues resulting from the pandemic, expects to finish the full project in less than 18 months The company is building its slab inventory to meet customer needs during the outage. Once completed, the upgraded furnace will add 300,000 tons of annual production and reduce costs, the company said.
The upgraded furnace, combined with the recent pellet agreement with U.S. Steel and the option to purchase a 25 percent share of the Minntac mine, will make Stelco one of lowest cost steel producers in North America.
Upgrades to the coke battery have been deferred due to the COVID-19 crisis and will resume when conditions permit, the company said.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
ArcelorMittal posts solid results as commissioning of Calvert EAF begins
AM/NS Calvert has begun commissioning its new electric-arc furnace, with plans to reach its full annual run rate of 1.65 million short tons a year from now.
Tampa Steel Conference: Tanners on rising capacities and storms brewing across steel
There's a lot of production waiting to come online
USS idles “B” battery at Clairton following explosion
U.S. Steel has idled its "B" Battery at its Clairton Coke Works near Pittsburgh following a “release of excess pressure” inside a section of the battery on Feb. 5.
ArcelorMittal to start building Calvert NGO electrical steel line this year
ArcelorMittal announced on Thursday that it will begin the construction of its new $1.2-billion electrical steel mill in Alabama later this year. The steelmaker said it is proceeding with plans to build the new greenfield mill near its existing AM/NS joint venture in Calvert, Ala. The ArcelorMittal Calvert plant will have an annealing pickling line, […]
AISI: US steel shipments rise in December
Domestic steel shipments increased month over month and year on year in December, according to the latest data from the American Iron and Steel Institute (AISI). US steel mills shipped 7,145,016 short tons (st) in December, up 0.9% from 7,082,921 st in December 2023 and 6.6% higher than 6,702,557 st in November 2024. For the full-year […]