Stelco plans to complete a blast furnace upgrade at its Lake Erie Works by the end of Q3 2020.
The blast furnace relining began July 17 and is expected to take about 75 days. Alan Kestenbaum, Stelco’s executive chairman and chief executive officer, said the blast furnace upgrade would improve the steelmaker’s cost structure, steel quality and output.
The blast furnace upgrade is the third strategic milestone achieved by the Canadian company this year after it increased its presence in the downstream steel sector and secured long-term supply of low-priced iron ore from the Minntac Mine, which has a future option to purchase a 25pc stake, Kestenbaum added.
He added that the company expects to sell all of its volumes this quarter as demand increases, but shipments will be almost half of what they were in Q3 2019 because of the blast furnace upgrade.
In H1 2020, the company’s total steel shipments rose by 3pc to 1.20mn nt (1.09mn mt) from 1.16mn nt through the first six months of 2019. During the same period under comparison, Stelco’s hot-rolled coil (HRC) shipments fell by 2pc to 870,000nt from 892,000nt, while its coated steel shipments rose by 66pc to 221,000nt from 133,000nt. Cold-rolled shipments (CRC) during this period more than doubled, rising by 117pc to 50,000nt from 23,000nt.
Stelco’s total steel shipments also increased by 6pc to 576,000nt in Q2 2020 from 545,000nt during the same period last year, led by a 13pc increase in HRC shipments to 423,000nt from 375,000nt. Coated steel shipments increased by 63pc to 109,000nt in Q2 2020 from 67,000nt during the same period last year, while CRC shipments fell by 21pc to 15,000nt from 19,000nt during the same period under comparison.
In H1 and Q2, HRC and other steel product shipments comprised 73pc and 5pc, respectively, of Stelco’s total shipments. Coated steel made up 18pc of the company’s shipments in H1 2020 and 19pc of its total shipments in the second quarter. CRC shipments in the first six months of 2020 comprised 4pc of the company’s total shipments and 3pc of shipments in Q2 2020.
The company’s EBITDA fell by 50pc in H1 2020 to $45mn ($34mn) from $93mn in H1 2019, but increased by 6pc in Q2 2020 to $34mn from $32mn during the same quarter last year.
US$1=C$1.31