United States Steel Corporation (NYSE: X) (“U. S. Steel”) announced that
it is advancing its metallics strategy by insourcing pig iron
capabilities at Gary Works. The approximately $60 million investment
will produce up to 500,000 tons of pig iron annually and provide a
critical raw material input for its electric arc furnaces (EAF). Once
complete, the Gary pig iron production is expected to provide nearly 50%
of Big River Steel’s other ore-based metallics needs, contribute over
$30 million of run-rate enterprise EBITDA benefits and deliver an
internal rate of return in excess of 30%.
“U. S. Steel’s low-cost iron ore is an important strategic advantage for
the company,” said U. S. Steel President and Chief Executive Officer
David B. Burritt. “Our ability to control this important steelmaking
input is a valuable competitive differentiator for our growing fleet of
electric arc furnaces. An investment in pig iron is an important first
step to translating our low-cost iron ore advantage to our EAF footprint
while driving efficiencies at Gary Works.”
The decision to self-fund pig iron production rather than contract is
expected to further enhance Big River Steel’s cost structure while
adding value at Gary Works by driving blast furnace efficiencies without
reducing Gary Works’ raw steel output. The permitting process is well
underway, with construction expected to commence in the first half of
2022. Pig iron production at Gary Works should begin in the first half
of 2023. The company expects to maintain its previously stated 2022
capital spending budget of approximately $2.3 billion by offsetting the
pig iron investment within the capital budget.
Source: U.S. Steel |
(To contact the reporter on this story: cody.wang@steelhome.cn or 86-555-2238837 18725550282) |