BlueScope Steel Evaluates $700M Investment in U.S.Steel Mills

SEATTLE (Scrap Monster): BlueScope Steel- Australia’s largest steel maker announced that it has initiated a comprehensive study to evaluate fresh investment of between $500 million and $700 million at its U.S. facilities. The proposed investment will add up to 900,000 metric tonnes of steelmaking capacity in addition to the existing capacity of 2.1 million tonnes per year. A final decision is expected by February next year.

The planned expansion of capacity at its Ohio North Star business will involve addition of a third electric arc furnace and a second slab caster. The construction works may extend to up to 3 years, if approved. The final decision will be taken based on the company’s financial principles. According to Mark Vassella, Bluescope chief executive, the project will deliver compelling outcomes, by way of equipping the company to meet rising U.S. domestic steel demand, especially at a time when high import tariffs have blocked the flow of foreign steel into the country.

Meantime, BlueScope’s profits totaled 1.57 billion, rising significantly by 119% over the previous year, during the full-year period ended June 30, 2018. The earnings growth was mainly on the back of rising steel prices in both the U.S. and Australian markets and the huge restructuring at its Port Kembla plant. BlueScope posted 9% rise in revenue to $11.49 billion. The company’s half-yearly output was the strongest in the past one decade.

The Australian steel division reported profits of $587 million, considerably higher by 28% from the previous year. The North Star steel operations too reported 6% jump in underlying earnings, backed by robust demand growth from U.S. construction and automotive industry.

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Commenting on its future outlook, BlueScope forecasts 10% jump in earnings for the first half of the financial year 2018-’19. This is when compared with the underlying earnings of $745 million in the second half of 2017-’18.