Steel Mills
CRU: Metallus breaks ground on military-funded furnace
Written by CRU
August 13, 2024
Specialty steel maker Metallus, formerly known as TimkenSteel, has officially begun work on a bloom reheating furnace at its Faircrest plant in Ohio.
Much of the $100+ million cost is being met by the US defense department as the steel produced at the mill will be used in 155mm artillery for the army. The furnace’s production start-up is expected late 2025.
Other business developments referred to by Metallus include installation of an automated grinding line, in-line saw and new camera inspection technologies. “Our capital investment strategy not only enhances our capacity and efficiency, but reflects the confidence placed in us by the Department of Defense,” said president and CEO Mike Williams, along with release of the company’s Q2 financial results.
Sales revenue declined 7.6% quarter on quarter (q/q) to $295 million because of shipments falling 3.3% to 150,100 short tons, an unfavorable price and mix, and a decline in raw material surcharges due to scrap prices falling.
Metallus attributed the decrease in deliveries to fewer dispatches to the industrial and energy end markets. Shipments to automotive clients were higher. Melt utilization dropped to 53% from 72%, which contributed to higher production costs. The company’s net income in Q2 shrank by 80.8% q/q to $4.6 million.
For Q3, the Ohio-based company is predicting lower shipments than in Q2 and shorter lead times, with bars’ to early September and tubes’ to early October.
“The third-quarter product mix is expected to be less favorable compared with the second quarter while base price per ton is anticipated to remain relatively steady,” Metallus added.
CEO Williams said, “We continue to face softness in the industrial and energy end markets given global economic conditions and elevated imports, customer and supply chain inventory positions, and scrap price uncertainty.”
This article was first published by CRU. To learn more about CRU’s services, visit www.crugroup.com.
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