Indian Steelmaker Essar
to Acquire Esmark Inc.
Service center turned mill operator Esmark Inc. has agreed to a merger offer from India’s Essar Steel Holdings Ltd. for a cash price of $17 per share. Once complete, Essar will assume control of the entire Esmark operation, including Wheeling-Pittsburgh Steel Corp.

In addition to the merger, Essar has agreed to a $110 million term loan to refinance the company’s existing term loan and provide additional liquidity.

It was liquidity issues in the face of rapidly rising raw material costs that forced Esmark’s management team to seek a larger acquirer. “With raw material costs escalating across all levels of the company—in iron ore, coal, coke, gas, electricity, scrap—it has become the larger players in pure size and scope that are in a strong position to combat these costs going forward. We were convinced that a strategic partner like Essar was the best possible solution for the long-term prospects of the company,” says James P. Bouchard, chairman and CEO of Esmark. “We targeted many companies, and Essar was clearly in front.”

Bouchard cites Essar’s commitment to its existing North American operations at Algoma and Minnesota Steel as the reason it was the proper choice to lead Esmark. “With the turnaround numbers they have demonstrated at Algoma, the capital commitments they have made, and the low-cost iron ore they have on the Mesabi range, we believe we have selected the absolute best partner to take this company and Wheeling-Pitt into the decades in front of us,” he says.

Bouchard adds that he will help with the transition before “handing over the reins to Essar.”

“Essar is very excited about the potential merger with a great company located in the steel capital of the United States. We plan to make significant investments in Wheeling-Pittsburgh Steel to make it a low-cost, technologically advanced steel producer,” says Madhu S. Vuppuluri, president of Essar Americas. “We look forward to a strong relationship with the United Steelworkers, our employees, as well as the local communities.”

Esmark plans to enter into definitive documentation with Essar upon expiration or waiver of the 52-day “right to bid” period set forth in the collective bargaining agreement with the United Steelworkers.

The acquisition occurs less than six months after privately held Esmark, which was founded as a service center company, completed the unprecedented acquisition of the troubled, publicly traded steelmaker. Bouchard envisioned the Wheeling-Pitt acquisition leading to the development of a new distribution network in the Midwest.

Last year, a group headed by Esmark reached an agreement to acquire Sparrows Point from ArcelorMittal, but financing fell through and the mill was later divested to Russian steelmaker Severstal.

U.S. Steel to Construct
Carbon Alloy Synthesis Facility in Alabama
To support its existing Fairfield Works facility near Birmingham, Ala., United States Steel Corp. will invest more than $150 million in the Port of Epes in Sumter County, Ala., on the construction of a carbon alloy synthesis facility and a cogeneration plant.

The proposed facility would utilize technology supplied by Carbonyx Inc. that processes coal into Cokonyx carbon alloy material, a product designed to displace traditionally manufactured coke, a key ingredient in steelmaking. The facility would produce 250,000 tons of Cokonyx per year, all of which would be used at U. S. Steel’s Fairfield Works.

The Carbonyx process employs technology that claims to significantly reduce emissions and energy consumption when compared to a traditional coke making facility or other commercial non-recovery processes. Additionally, the gasses created during the process would be utilized in the proposed cogeneration facility.

“The future of steelmaking requires new thinking and the use of breakthrough technologies in order to operate in cost-effective and environmentally responsible ways,” says U.S. Steel Chairman and CEO John P. Surma. “By partnering with Carbonyx, U.S. Steel is demonstrating its willingness to utilize innovative technologies as alternatives to traditional coke making that will still result in a high-quality carbon source for our Fairfield Works and ensure consistent environmental performance and compliance.”

U.S. Steel operates two facilities in Fairfield: Fairfield Works, which is the largest steelmaking facility in Alabama with an annual raw steelmaking capability of 2.4 million net tons, and Fairfield Tubular Operations, a seamless pipe mill that produces tubular products primarily for the energy industry. 

New Galvanizing Line Planned
at Nippon, ArcelorMittal Venture
ArcelorMittal is expanding its joint venture partnership with Nippon Steel Corp. by building a new continuous galvanizing line at the I/N Kote facility in New Carlisle, Ind. The new line will have an annual capacity of 480,000 tons and will double I/N Kote’s galvanized production capacity.

In addition, the new line will offer high-grade, high-quality coated sheets that promote improved safety and fuel efficiency in automobiles.

“This is truly an exciting investment and one that will ensure ArcelorMittal and Nippon Steel maintain our leadership position in supplying the North American automotive industry with high-quality steels,” says Michael Rippey, president and CEO of ArcelorMittal USA. “This $240 million investment at I/N Kote will add a second galvanizing line that will double our production capacity and provide approximately 100 new full-time jobs.”

The continuous galvanizing line will be housed in a new 240,000-square-foot building and will be supplied with cold-rolled coils from ArcelorMittal’s Indiana Harbor and Burns Harbor operations, as well as ArcelorMittal and Nippon Steel’s joint venture at I/N Tek. Groundbreaking is expected to take place later this year with completion slated for late 2010.

Founded in 1991, I/N Kote is a 50-50 joint venture between ArcelorMittal and Nippon Steel. The facility currently produces 450,000 tons of hot-dip galvanized and galvannealed sheet and 410,000 tons of electrogalvanized sheet annually.

In other action, ArcelorMittal has signed a new long-term contract with Companhia Vale do Rio Doce to supply iron ore and pellets to its plants in Europe, Africa and the Americas. Under these long-term contracts, which are the largest ever signed between a steel company and an iron ore supplier, Vale will supply approximately 480 million tons of iron ore and pellets to ArcelorMittal plants over the next 10 years.

“This is an important agreement for ArcelorMittal as it ensures that we have the required levels of iron ore to operate our steel plants fully in line with current global demand,” says Davinder Chugh, executive vice president of shared services. “Additionally, the company has 45 percent captive iron-ore self-sufficiency, with plans to increase this further to 75 percent.”

SSAB to Increase Heat-Treat Capacity
Svenskt Stal AB plans to construct a new advanced heat-treating line for quench and tempered steel plate in the United States. The investment, between $150 million and $250 million, is part of SSAB’s strategic focus to increase its volume of core niche steel products, and to better meet customers’ growing needs for quench and tempered steels, the company says.

The heat-treating facility, which will be located at one of SSAB’s two plate mills in Montpelier, Iowa, or Mobile, Ala., will process steel produced at the company’s plants. The final location of the facility will be based on consideration of site-specific issues, including regulatory approvals.

Republic Installing New Equipment at Lackawanna
Republic Engineered Products, Fairlawn, Ohio, will invest approximately $20 million in a precision sizing mill and related equipment for its Lackawanna steel rolling facility in Blasdell, N.Y.

The new equipment will enable Republic to produce round and hex-shaped bars and coils with closer tolerances for the near-net forging and cold-forming industries. The project will be completed in the fourth quarter of 2009.

“This plant has been an excellent performer for several decades. The new equipment will be an important component in ensuring that Republic maintains its position as North America’s leading special bar quality producer,” says Jaime Vigil, Republic’s president and CEO.

LME Offers Billet Trading on Ring
Trading in steel futures commenced on the London Metal Exchange Ring in April following the successful test phase of trading on its telephone and electronic market, LME Select. Two regional steel billet contracts have been launched for Mediterranean and Far East delivery. Each contract is for 65 tons of billet.

During recent trading, billet prices have been in the region of $950 per ton, giving a contract value of over $60,000. In volatile markets, billet prices have trebled since 2003, driven largely by the worldwide construction boom, LME official say.

“Billet has key commodity characteristics in that it is a standardized, fungible product with numerous producers and consumers and a strong merchant element,” says LME Commercial Director Liz Milan. “We have worked closely with all these groups to produce a contract that meets their requirements and will bring transparency, reference pricing and risk management to this important market.”

During test phase trading, since Feb. 25, almost 500 contracts were traded on both LME Select and the telephone market with a value in excess of $27 million. The first prompt date for the new contract will be July 28. 

Century Steel Acquired
By Pacific Coast Steel
San Diego, Calif.-based Pacific Coast Steel, a joint venture of Gerdau Ameristeel Corp., has acquired all the assets of Century Steel Inc., a reinforcing and structural steel contractor specializing in the fabrication and installation of structural steel and reinforcing steel products. The acquisition was valued at approximately $152 million.

CSI, headquartered in Las Vegas, operates reinforcing and structural steel contracting businesses in Nevada, California, Utah and New Mexico. With fabrication facilities that have an annual capacity in excess of 250,000 tons per year, CSI participates in virtually all segments of the marketplace in the western U.S.

Gerdau Ameristeel, Tampa, Fla., also announced that, concurrent with the acquisition of Century, the company will pay $68 million to increase its equity participation in the PCS joint venture to approximately 84 percent.

Briefs
Outokumpu will sell its remaining copper tube assets to Cupori Group Oy, a company owned by the current top management of Outokumpu’s Copper Tube and Brass division. The assets sold comprise the copper plumbing installation and industrial tube manufacturing companies in Pori in Finland, Zaratamo in Spain, Västerås in Sweden and Liège in Belgium, as well as the copper tube sales companies in France, Germany and Italy. 

AK Steel, West Chester, Ohio, will increase spot market prices for its carbon steel products by $50 per ton for all new orders. AK Steel said that the price increase is in response to increased demand for carbon steel products, as well as the need to recover unprecedented increases in steelmaking inputs.

Century Aluminum Co., Monterey, Calif., has entered a joint venture agreement to acquire a 40 percent stake in Baise Haohai Carbon Co. Ltd., which owns a newly constructed carbon anode and cathode facility in southern China. Century will utilize the output from this plant to secure carbon supplies for its worldwide smelter operations.

Commercial Metals Co., Irving, Texas, has completed the acquisition of Rebar Services and Supply Co., Fort Worth, Texas. RSS, a rebar fabricator serving the North Texas area, will operate as CMC Rebar as part of the company’s Americas fabrication and distribution segment.

Cleveland Motion Controls, a subsidiary of ITT Corp., has acquired Charleston, S.C.-based Kaliburn Inc., a leader in the design and manufacture of plasma arc cutting equipment and consumables for metal fabrication.  Kaliburn’s products and services will be sold and marketed along with the Burny/AMC product line. 

AmeriCast Technologies Inc., a subsidiary of New York private equity firm Castle Harlan Inc., has purchased A.G. Anderson Ltd., a foundry in London, Ont., that produces castings in large steel, stainless steel and complex ferrous alloys, primarily for the energy industry. The deal follows the April 2007 acquisition of Atlas Castings and Technology, a maker of large specialty steel castings.

Hypertherm, Hanover, N.H., supplier of plasma metal cutting technology, has reapportioned its North American territory from two divisions into three regions: the Northeastern U.S. and Canada, the Central and Southeastern U.S., and the Western U.S. Jeff Staton, formerly Hypertherm’s Western division manager, will head the newly created Northeastern U.S. and Canadian region. Two former Hypertherm district sales managers, David Taylor and Alan Hamilton, will lead the Central and Southeastern U.S. regions and the Western United States region, respectively.

UC Rusal, Moscow, has completed the acquisition of a 25 percent plus one share stake in Norilsk Nickel from ONEXIM Group. Norilsk Nickel is one of the world’s leading producers of nickel, palladium, copper and platinum.

Broner Metals Solutions will supply its production planning and scheduling software to Tianjin Tiantie Metallurgical Group for its project in China’s Hebei province. The company currently produces pig iron and long products, but is building a new flat products plant that will eventually replace its existing long products facilities.

The Timken Company has announced it will increase base prices on hot-rolled, cold-finished and thermal-treated special bar quality products by up to $50 per ton, based on size.  This price increase is effective with shipments beginning on July 1, 2008. Raw-material surcharges will remain in effect.

Universal Stainless & Alloy Products Inc., Bridgeville, Pa., has announced base price increases of 5 to 7 percent on all tool steel products manufactured at its Bridgeville and Dunkirk facilities. The increase will be effective with all new orders entered on May 1. Current material and energy surcharges will remain in effect. "The price adjustment is necessary to offset the impact of sharply higher energy and operating supply costs as we focus on responding to continued strong market demand. This action will enable us to continue our reinvestment in equipment and facilities to better serve our customers," says Chris Zimmer, vice president of sales and marketing.

The Society of Manufacturing Engineers, Dearborn, Mich., along with its Southeast Michigan Chapters, is offering a very different type of learning environment at "A Passion for Manufacturing: 2008 Annual Meeting & Interactive Unconference," June 1-2, at the Detroit Marriott at the Renaissance Center. The "Unconference" goes beyond the traditional meeting by featuring participatory sessions, a lean manufacturing plant tour and opportunities for networking and problem-solving with other professionals.  For more detailed information about the two-day event, visit, www.sme.org/annualmeeting.

The Buy America Coalition, consisting of the American Iron and Steel Institute, Committee on Pipe and Tube Imports, National Steel Bridge Alliance and Steel Manufacturers Association, are calling for support of legislation entitled "The American Steel First Act." The coalition was instrumental in helping to develop the bill, which would require federally funded construction projects under the Department of Transportation, the Department of Defense and the Department of Homeland Security to use 100 percent American-made steel products. This expands the successful Buy America Act requirements, which currently apply to Federal Transportation Administration projects, to also include other projects initiated by the DOT, DOD and DHS.

People
United States Steel Corp., Pittsburgh, announced a series of management changes to its North American and European commercial organizations. Richard Beltz has been named general manager, flat-rolled marketing, reporting to Richard M. Efkeman, vice president-worldwide marketing. John B. Peters will return from U.S. Steel Kosice to become general manager-North American flat-rolled customer service. Peter Alvarado will replace Peters as vice president-commercial, Europe, and Bert J. Phillips will fill Alvarado’s role as general manager-automotive.

RathGibson, Lincolnshire, Ill., has made several changes to its management team, including the appointment of Michael Schwartz as president and chief operating officer. Other new appointments include Matthew Bernstein as vice president of business development, John Fortin as vice president-general manager of the Janesville, Wis., facility, John Sinks as vice president of sales and marketing, and Steve Baryschpolec as quality manager of the metallurgical laboratory in North Branch, N.J.

ArcelorMittal has appointed three new members to its group management board. The appointments of Sudhir Maheshwari, executive vice president for finance and M&A, Christophe Cornier, executive vice president for flat products Western Europe, and Davinder Chugh, executive vice president for shared services, bring board membership to seven.

Hypertherm, Hanover, N.H., has appointed Tim Oney as its new national distribution manager. He had been district manager of Hypertherm’s Kentucky market for 10 years.