Finns Fire up Massive Melt Shop

In a January 2012 move to become the largest stainless steel producer in the world, the Finnish company Outokumpu Oyj paid $3.6 billion for the stainless steel division of ThyssenKrupp AG, including the stainless operations of TK’s $5 billion complex in north Mobile County.

Quickly turning that investment into cash flow depends on full capacity operation of the Alabama stainless mill, including the massive melt shop, which started up in November and ramped up to a media unveiling this January.   

“We are in the process now of hiring the last 150 jobs, ” said Mick Wallis, CEO of Outokumpu Stainless USA. “We are adding the third and fourth shifts, which will have the plant working 24/7.”

Centerpiece of the press show was the electric-arc furnace that melts scrap into 1, 800-ton ladles of molten steel, ready for an assembly line of alchemy: from de-slagging, mixing additives, refining and re-firing in a secondary furnace.

“Two million tons a year is the U.S. stainless demand, and our goal is to capture 25 percent of the U.S. market, ” said Wallis, who pegged the company’s pre-startup U.S. market share at 14 percent.

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Bloomberg News reported the Outokumpu-ThyssenKrupp Stainless combination captures a European market share of 50 percent.

With the recession, world steel markets became oversupplied, prompting ongoing consolidations. Outokumpu’s goals hinge on continued recovery from the recession.

“Demand for stainless in the U.S. fell in 2008, ” said Wallis. “We expect it to ramp up over the next two to three years.”

A year ago, investors seemed less hopeful than Wallis. The December 2012 merger prompted a 15 percent decline in the Finnish company’s stock.

“We are a new entrant into the U.S. market, and we expect to become a strong number two in the market in the next 18 months, ” said Wallis. “There are four other top suppliers in the U.S. market, and two of them are not suppliers of the full range of products.”

Steel from the Alabama plant will go into auto parts, appliances, pipes, tubes, and a wide variety of fabrications made by service centers. Unique to the U.S. market is 72-inch plate that is the widest available, in demand by storage tank manufacturers.

Chris McFadyen

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