ThyssenKrupp stainless and steel plants startup of their cold rolling and cold annealing and pickling lines Wednesday Oct. 6, 2010. (Credit Photo – Press-Register/Victor Calhoun)
ThyssenKrupp AG officials will arrive next week for the grand opening of the company’s Calvert complex bearing a gift — a check to build the delayed stainless steel melt shop.”Construction can now begin,” Ekkehard Schulz, the outgoing head of Germany’s largest steelmaker, said Tuesday in announcing that the company’s board had approved funding for the unit, which will melt scrap metal into new stainless steel.Going ahead with the melt shop now means that construction activity, which has employed as many as 6,000 workers on the site at one time, will continue in force for the next two years. With the overall construction market weak in the United States, contractors have competed fiercely for the ThyssenKrupp work.Company officials have said the melt shop will cost hundreds of millions of dollars.Originally planned to start operation this year, it had been delayed twice as ThyssenKrupp cut its construction spending in the face of the worldwide recession. The most recent target for the opening had been between the end of 2012 and 2014, depending on how the company judged demand.Bloomberg News reported that the unit would begin operations before the end of 2012.Chief Financial Officer Alan Hippe told analysts that “in the U.S., we see overall a pretty good environment for stainless and also opportunities, which is why we are bringing the melt shop a little bit nearer to present.”Spokespersons for ThyssenKrupp in Calvert and Germany said they had not further comment about the timing of the decision. A spokesman in Germany said ThyssenKrupp would have more to say during the Calvert facility’s grand opening ceremonies next week.The $5 billion Calvert complex is shared by the smaller stainless and larger carbon steel operations, which are separately managed. Steel for the carbon side is made in Brazil and shipped to the site.The Financial Times had reported last week, citing unnamed sources, that building the melt shop quickly would help the company sell stainless steel more cheaply in the United States. ThyssenKrupp already commands 16 percent of the U.S. stainless steel market, Schulz said Tuesday.ThyssenKrupp’s plan to make 1 million tons a year of stainless steel in Calvert have alarmed the domestic stainless industry, which has warned of a glut of the material. ThyssenKrupp’s European stainless operations also face a deeply oversupplied market, and industry-wide efforts to consolidate production have not gone very far there.Though analysts had questioned whether the delay would end in cancellation, company officials have always been adamant that they needed the melt shop in Calvert to give ThyssenKrupp the flexibility to fill orders quickly. The melt shop also is supposed to supply material to ThyssenKrupp’s Mexinox stainless operation in Mexico.
Source : Al