US steel EAFs try to fill blast furnace gap

US-based electric arc furnace (EAF) steelmakers are trying to fill production gaps left by the idling of integrated steel mills in the Midwest, where more than 8mn short tons (st)/yr of hot metal capacity has come offline in the last six years.

While blast furnaces have been idled in Kentucky, Illinois, Indiana, and Michigan, scrap-based electric arc furnace (EAF) producers are rapidly working to fill at least part of the gap in the Midwest, with current projects and newly announced ones underlining the push.

Three projects will bring more than 5.4mn st/yr of new flat-rolled steelmaking capacity to the Midwest, partially offsetting lost production from idled blast furnaces, but still falling short of prior capacity by 2mn st/yr.

EAF steelmaker Nucor, the largest in the US, is working to complete a 1.4mn st/yr expansion of its Gallatin, Kentucky, flat-rolled mill, which will have a new capacity of 3mn st/yr when it starts ramping up the expansion next year.

Through an expansion and debottlenecking at its North Star mill in Ohio, Australian steelmaker BlueScope is working to expand steelmaking capacity by 1.5mn st/yr. Part of that expansion, a 937,000 st/yr new EAF, will start up in the first half of 2022.

In an announcement 20 September Nucor said it is also planning to build a 3mn st/yr mill in either Ohio, Pennsylvania, or West Virginia, with a goal to target the automotive industry, which has traditionally been served by integrated mills like US Steel and Cleveland-Cliffs.

A wild card in the steel industry is where US Steel decides to site its new 3mn st/yr EAF flat-rolled mill it announced on 17 September. The steelmaker, which is transitioning away from blast furnace steel production, said it is considering placing it at either one of its existing EAF sites in Alabama or Arkansas or a greenfield location.

Prior to being purchased by US Steel in January, Arkansas-based EAF steelmaker Big River Steel's leadership was planning to build a new flat-rolled mill in Brownsville, Texas, on the border with Mexico.

US Steel's final location decision for the new EAF will determine if the Midwest or the south emerges as the largest region for new steel production. Sources have said it is likely that US Steel will shutter some inefficient blast furnace operations in conjunction with the startup of the new mill. The company has said it is focusing investments, specifically on its Gary Works, Indiana, integrated steel mill, while pulling investments from its Mon Valley Works, Pennsylvania, mill and keeping one of two blast furnaces idled at its Granite City Works mill in Illinois. Any such cuts would expand the shortfall in Midwest production.

In the south another 4.65mn st/yr of production is coming online in the next two years, led by Steel Dynamics' (SDI) new 3mn st/yr flat-rolled mill in Texas. The steelmaker expects to start melting in mid-November at its new mill in Sinton, Texas, near the port city of Corpus Christi.

In Alabama the joint venture mill run by ArcelorMittal and Nippon Steel called AM/NS Calvert is building a 1.65mn st/yr EAF to provide slabs to the mills rerolling operations, offsetting imports and domestically purchased slabs.

The south's growing share of total HRC production raises questions about current pricing models, which largely peg contracts to Midwest HRC levels.

All told nearly 13mn st/yr of flat-rolled EAF steel production is planned to come online in the next four years across the US.

By Rye Druzin

US steelmaking adjustments since 2015