SDI plans purchase of Kentucky Electric Steel

US steelmaker Steel Dynamics (SDI) today confirmed it plans to purchase the idled Kentucky Electric Steel mill in Ashland, Kentucky.

"I would put it in the classification of planned acquisition right now," SDI chief executive Mark Millett said on an earnings call. "We haven't closed on it, although it's looking favorable."

The Fort Wayne, Indiana-based company did not offer any outlook on the timing around the acquisition or potential restart of the northeast Kentucky mill.

Kentucky Electric Steel produced special bar quality (SBQ) and merchant bar quality (MBQ) flat products for generic and specialty applications, including leaf-spring suspension parts used in trucks, SUVs and trailers. Millett said the facility possesses 200,000st of rolling capacity.

The mill, owned by Hammond, Indiana-based Specialty Steel Works, ceased operations in early 2018 after producing steel since the 1960s.

SDI does not plan to start-up the hot side of the plant and will instead use the rolling operations to better utilize billet capacity at its Steel of West Virginia segment and Roanoke, Virginia, bar mill. Kentucky Electric Steel's electric arc furnace has an estimated annual melting capacity of 400,000st.

Capacity utilization across SDI's mills increased to 99pc in the second quarter from 91pc in the same period a year earlier on stronger demand across its flat and long product offerings.

Long product shipments rose by 33pc in the quarter to 910,135st on stronger volumes from each of the segment's mills.

Roanoke bar shipments increased to 140,143st from 116,231st, while shipments from the company's Steel of West Virginia specialty steelmaking segment increased to 78,881st from 76,054st.