TPT May 2008

The acquisition of the former Bethlehem Steel unit will expand Severstal’s presence in the US with a capacity addition equivalent to about one-fifth of the company’s crude steel output last year. Severstal already owns the former Rouge Steel plant in Dearborn, Michigan, and the SeverCorr joint venture in Columbus, Mississippi. Its North American division was its least profitable in 2007, due to a weak market and the costs of a blast furnace relining. But the company said that it remains committed to growth in North America and believes in the long-term prospects of the US market. Elsewhere in steel . . . › Wheeling-Pittsburgh Steel Corp (Morgantown, West Virginia) said 31 March that it would shut down its mill in Allenport, Pennsylvania, and idle two of the three galvanizing lines at its processing plant in Martins Ferry, Ohio. Wheeling-Pitt had said previously that it would spend $125 million on a new cold mill and galvanizing complex in Steubenville, Ohio. It also is considering the relocation of a bridge-decking facility in Sharon, Pennsylvania, now operating in space leased from the former Wheatland Tube Company. Wheeling-Pitt – restructuring after two bankruptcies – is a subsidiary of Illinois-based Esmark Inc. Earlier in March, Esmark sold its minority interest in Wheeling-Nisshin Inc, a small steel-coating company in Follansbee, West Virginia, for $71.4 million to Nisshin Holding Inc, of Japan. In brief . . . › ‘Intermodal transportation’ refers to the movement of containers filled with imported goods taken off vessels at US ports and taken by train and/or truck to distribution centres around the country. According to the Association of American Railroads, an industry group based in Washington DC, for the first two months of this year the volume of intermodal rail freight was down 3.4 per cent compared to the same period of 2007, when intermodal traffic was flat. Now, as the railroads feel the effects of slower international business and the decline in the value of the dollar, the downturn in this bellwether transportation area has idled railroad cars across the country. › In contrast to intermodal traffic, however, the movement of coal and ore across the US has risen, with transport by rail of this freight up 1.7 per cent for the first two months of 2008 over the same period a year earlier. This reflects the rising demand for coal worldwide that is turning the US into a major exporter of coal. According to coal industry statistics, exports of the most plentiful fossil fuel in the country grew from 49 million tons in 2006 to nearly 59 million tons in 2007, as domestic production increased by 1 per cent. Coal executives look for exports to reach 80 million tons this year, and to rise as high as 120 million tons over the next few years. Used to produce about half the electric power in the US, in addition to its importance in steel production, coal will probably remain an economical buy for Americans for the foreseeable future. But domestic prices are already on the increase, and a significant upsurge in demand from overseas could have an inflationary impact. The new demand abroad comes at a time when coal is under fierce political attack at home. More than 50 coal-fired power plants proposed for the US were delayed or cancelled over the last year because of concerns over greenhouse gas emissions.

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M ay 2008

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