JSW halts EAF install at Texas steel mill

JSW Steel has delayed the construction of a new electric arc furnace (EAF) and slab caster at its Baytown, Texas, plate and pipe mill.

The company's US chief executive John Hritz cited current market conditions and the US trade policy environment for the decision to pause the additions to the Baytown mill. The company had announced plans to build the EAF in October 2018.

Hritz said the company remains committed to being a fully melt and manufactured enterprise in the US, and continues to work to ramp up the 1.5mn t/yr (1.7mn st/yr) EAF at its Mingo Junction, Ohio, flat-rolled mill.

JSW Steel chief financial officer Seshagiri Rao said on an earnings call on 26 July that instead of waiting for the EAF and catser to be built at Baytown, the mill would be supplied with steel slabs from Mingo Junction, allowing it to qualify for government orders within the US. The Texas facility has traditionally used imported semi-finished slabs.

The decision to pause construction in Baytown and use domestically-made slabs from Mingo Junction comes as India-based JSW is suing the US Department of Commerce over its process of denial of Section 232 steel tariff exclusion requests.

JSW Steel filed requests for 12 exemptions, half for steel slab imports from its operations in India and the other half for steel slab imports from ArcelorMittal's Mexico operations. The exclusion requests for imported slabs from India were denied in April by the Commerce Department, while the Mexican imports exclusions requests were denied in May.

Both of JSW's US operations have operated well under capacity recently.

The Baytown facility produced 84,000t of plate at a utilization rate of 36pc, while the pipe segment produced 23,100t at a utilization rate of 17pc for the company's fiscal first quarter ended 30 June.

Mingo Junction produced 80,000t of steel in the first quarter.