Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

BlueScope has postponed the expansion of its North Star electric-arc furnace (EAF) meltshop as part of cost-cutting measures being taken by the steelmaker to safeguard the company from COVID-19’s economic impact.


The $1bn construction and installation plan will be delayed for the next six months to reduce spend and remain flexible until the situation improves, the company indicated in a press announcement. The new EAF would expand hot-rolled coil output volumes by 937,000-1.49mn nt per year (850,000-1.35mn mt).


The asset was initially supported by sufficient local prime scrap from automakers near the plant’s Toledo, Ohio location. However, they are now producing at largely reduced volumes compared to typical targets. Cleveland Cliffs, another probable source for providing prime scrap alternatives with its new hot briquetted iron (HBI) venture, is also facing reduced demand due to the pandemic.


The construction postponement is one of four actions being taken by BlueScope to support the company’s financial position. 


The company has also condensed non-essential capital spending and has projected capital spending during the second half at around $200mn, a $40mn reduction from its Feb 2020 guidance, BlueScope indicated.


The company continues to monitor conditions and will provide project updates at a later time. 



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