ArcelorMittal: CSP Deal to Close in Feb, NA Expansions Progress

The Luxembourg-based steelmaker had said that the deal had received final antitrust clearance in commentary released with its fourth quarter earnings results.

CSP is a joint venture between Vale, which holds a 50% stake in the company, and South Korean steelmakers Dongkuk and Posco, which hold 30% and 20% stakes, respectively. It began producing steel slabs in 2016 and has a capacity of 3 million tons of slabs per year.

The comments about CSP came as ArcelorMittal also provided updates on expansions plans in North America – notably AM/NS Calvert, its joint venture sheet mill in Alabama; its relatively new hot-strip mill in Mexico; and its majority-owned hot-briquetted iron (HBI) plant near Corpus Christi, Texas.

Calvert

Calvert has capacity to produce 5.3 million tons of carbon flat-rolled steel per year. It currently relies on slabs provided from third parties because it does not have melt capacity

The mill is expected to add a $775-million electric-arc furnace (EAF) with capacity of 1.65 million tons per year (tpy). ArcelorMittal continues to consider adding a second EAF of the same capacity at Calvert.

“Our expected completion date is end of the year, and then we will take it from there,” Christino said.

He noted that the startup of the new EAF at Calvert would coincide with the ramping up of a new hot-strip mill in Mexico.

Mexico

The hot-strip mill, in Lázaro Cárdenas, a port city in the Mexican state Michoacán, made its first coil in late 2021.

The mill, which is expected to give ArcelorMittal additional capacity of approximately 2.75 million stpy, is one of a host of sheet capacity expansions taking place in North America.

(Editor’s note: You can keep track of new North American flat-rolled steel capacity here.)

The hot-strip mill was running at about 50% of its rated capacity following a strong showing in December, Christino said.

ArcelorMittal will continue to ramp up the mill. But that’s not the only goal for the facility. “The focus here has also moved a little bit now, to more toward also product development … so that we can enlarge the customer base,” he said.

Also in Mexico, the company continues to press ahead with the $150-million expansion at its Las Truchas mining operations to increase pellet feed production to 2.3 million tpy, up from 1 million tpy from previously.

Approximately 2 million tpy will be devoted to blast furnace pellets and the remaining 300,000 tons to pellets to feed direct-reduced-iron (DRI) units.

Expected completion of that project has been pushed back to the second half of 2024 because of delays in equipment deliveries, construction work, in receiving construction permits, the company said.

Texas HBI

Also on the raw material side, ArcelorMittal said it has been pleased with its deal to acquire an 80% stake in a south Texas hot-briquetted iron (HBI) plant built by Austrian steelmaker Voestalpine.

That facility is located in Gregory, Texas, just outside of Corpus Christi. The company is enthused by the number of carbon capture and sequestration (CCS) and hydrogen projects in the area, CEO Aditya Mittal said.

“It is really the basin of energy, and so we have a very good strategic asset there that we can grow and develop to supply low-carbon metallics on a global basis,” he said.

Aditya Mittal said the company also sees opportunities in the Inflation Reduction Act, which was signed into law in August by President Biden, and in “Buy American” regulations that require the US government to give preferential treatment to steel made in the US.

ArcelorMittal doesn’t have enough detail on the IRA to make any investment decisions now, and probably won’t until this summer.

“I think post that clarity, you could make the appropriate investment decisions,” Mittal said. “At this point in time there’s nothing imminent, but clearly something that we are looking at very actively.”

By Michael Cowden, michael@steelmarketupdate.com