Stelco expects to commission the new pig iron caster at its Lake Erie Works in Ontario by the end of this year, company executives said Nov. 12.
"In the coming months, we expect to complete work on our new pig iron caster that will enable us to further enhance our tactical flexibility and maximize our profitability by serving [electric arc furnace] producers and foundries who are interested in these valuable iron units as they face continued supply squeezes and price increases in the scrap market," Stelco CEO Alan Kestenbaum said during the Canadian steelmaker's third quarter conference call.
Stelco, the largest producer of flat-rolled steel in Canada, first announced plans to build the pig iron caster in November 2019 to increase the company's capacity and offer pig iron sales to the merchant market, stating at the time it would have a nameplate capacity of more than 1 million st/year.
Construction of the cogeneration facility at Lake Erie Works is also continuing, with the expected commissioning of the facility slated for mid-2022, Kestenbaum said. Stelco in June entered into an agreement with DTE Energy Services for the development, construction and operation of a cogeneration facility at the Nanticoke, Ontario, mill.
Stelco's Q3 steel shipments fell sharply year over year as the company took a scheduled outage to complete the blast furnace upgrade and reline project at the Lake Erie Works. Work on the project, which increases Stelco's output by 300,000 st/year, was completed in October.
Stelco's steel shipments totaled 334,000 st in Q3, a drop of 49% compared with the 654,000 st of steel the company shipped in the year-ago quarter.
Shipments of hot-rolled coil fell 50% year on year to 211,000 st, while shipments of coated steel were down 13% at 76,000 st by the same comparison. Shipments of cold-rolled coil dropped by 38% year on year to 16,000 st, Stelco said.
Despite the drop in coated and cold-rolled shipments in Q3, year-to-date Stelco's coated and cold-rolled steel shipments are up by 35% each compared with 2019, as the company has continued to focus on growing its share in value-add products.
With the blast furnace reline behind the company, Stelco expects its Q4 shipments to increase, with the company already sold out for Q4 and booking orders for Q1, Kestenbaum said.
The company expects its shipments in Q4 to be approximately 600,000 st, Stelco CFO Paul Scherzer said.
Overall, Stelco reported a net loss of C$88 million ($67 million) on sales of C$237 million in Q3. This compares with net income of C$0 on sales of C$464 million in the year-ago period.
