Jan 28 (Reuters) – United States Steel Corp said on
Tuesday it was applying for permits to build an electric arc
furnace at its Alabama steelmaking plant to replace a blast
furnace, a move by the loss making company to cut costs and
revamp one of its older, less efficient operations.
U.S. Steel Chief Executive Officer Mario Longhi declined to
say what the new furnace at its Fairfield Works operation would
cost but said it would have a steel production capacity of about
1.1 million net tons per year.
The Pittsburgh-based company, faced with a market weighed
down by excess steelmaking capacity and weakening demand, plans
to cut costs over several years.
Electric arc furnaces melt steel scrap, rather than iron
ore, to make high-quality steel and would reduce the company’s
cost of transporting raw materials such as iron ore and coke to
the Fairfield operation and reduce its exposure to the merchant
coal market.
Electric arc furnaces form the backbone of steelmaking
operations at Nucor Corp., U.S. Steel’s profitable
rival.
“The business case for this project as we see it today is
strong enough, which is why we’re filing for the permits now and
we have started the basic engineering for the new facility,”
Longhi said on a conference call with company analysts and
investors.
Permitting is expected to take up to a year after which
construction of the furnace could begin in the third quarter of
2015 with the project completed in mid-2017.
U.S. Steel reported a wider fourth quarter loss on Monday as
total steel shipments declined compared to last year.
