LORAIN — United States Steel Corp. could expand its steelmaking in Lorain with more pipe and will have a new joint venture with neighbor Republic Steel to supply the metal.
U.S. Steel Chairman and Chief Executive Officer John Surma announced the plans as part of a shareholder meeting this week in Pittsburgh.
The steelmaker is considering an expansion at its seamless pipe hot mill to expand the range of outside diameter of the pipes made in Lorain, Surma said. The company makes pipes with a maximum outside diameter of 4.875 inches, but would expand that to slightly more than 6 inches for use in gas and oil drilling in shale, he said.World Steel Tube Provide
“We believe the project would also allow for increased utilization of what is already a highly productive asset, (and) is in alignment with our strategic objective to increase our premium tubular products capabilities, and would allow us to better serve the specific product needs of an important and growing customer base operating in the Marcellus and Utica shale plays,” Surma said in his remarks at a shareholders meeting this week.
The company also has an agreement with Republic Steel to supply steel rounds to U.S.World Steel Tube Provide Steel’s Lorain Tubular Operations starting in 2014. The supply agreement could happen once Republic Steel completes and operates its new electric arc furnace, which is under construction now.
“We expect to realize significant benefits from this arrangement, including reduced transportation costs, as well as increased flexibility in the ordering and receipt of steel rounds, as shorter lead times and faster delivery should improve our ability to match our rounds needs to our order book and manage our rounds inventory at levels aligned with our business requirements,” Surma said.
It was unclear what the new projects might mean for more jobs at the plant.
The company has not approached Lorain officials about possible new hirings or economic incentives to expand, said Mayor Chase Ritenauer. City officials would be open to discussing any benefits available, he said.World Steel Tube Provide
The mayor also praised the local operations manager for U.S. Steel and Lorain’s workers and said Lorain officials want to form partnerships with the companies that operate the steel mills.
“The environment is getting better and we’re doing all we can to sell Lorain to Republic and to U.S. Steel,” Ritenauer said. “It makes sense. We’re steel city and we’re hopeful that we can continue to have success stories.” Continued...