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Hamilton Economic Development

Dofasco brightens a bleak week for steel

Hamilton steel giant Dofasco anchors the harbou's east endHamilton giant ships more high-quality product in Q3 than it ever has

ArcelorMittal Dofasco shipped more of its prime high-quality steel in the third quarter of 2013 than it ever has before.

The company shipped 1.128 million net tons of prime steel between June and September.

Prime steel or “firsts” is the steel that meets all customer specifications, right down to thousandths of a millimetre in thickness and parts per million in chemistry. Steel that does not meet that standard is sold as “seconds.”

In a news release late Thursday, the Hamilton operation said it also expects 2013 full-year shipments to be a record for the second year in a row.

The news is a ray of light in what has been a dark week for the steel industry in Hamilton — U.S. Steel announced Oct. 29 that it is ending a century of steelmaking at its Hamilton Works plant.

ArcelorMittal Dofasco says it achieved the record at a time when its domestic market has been shrinking as manufacturers leave to produce in the United States, Mexico and elsewhere. The Canadian market remains 20 per cent lower than the peak market of 2006.

“Hitting a shipment record like this in a much smaller market is a major achievement,” said Brad Davey, vice-president, commercial.

The prime steel is destined for the automotive, construction, appliances and packaging sectors, along with steel service centres.

ArcelorMittal Dofasco has been ranked No. 1 for overall customer satisfaction against its direct competitors in the largest North American independent survey.

Davey said the company is dedicated to continuous improvement to drive innovation and boost productivity and efficiency.

“We continue to invest and innovate in order to meet our customers’ needs and to produce increasingly sophisticated steels … including those that are contributing to achieving more fuel efficient cars and sustainable buildings,” he said.

“Our future is bright and so is that of steelmaking in Hamilton. Steel is part of Hamilton’s DNA and manufacturing is a foundation to any successful economy.”

Luxembourg-based ArcelorMittal cited an improving world economy when it announced a smaller third-quarter loss Thursday. The world’s largest steelmaker said it had a net loss of $193 million in the third quarter, a substantial reduction from the $652 million it lost in the same period last year.

Earnings before interest, taxes, depreciation and amortization — or EBITDA, a metric followed closely in the steel industry — increased by 19 per cent to $1.7 billion, and steel shipments rose 6 per cent, although revenues declined slightly to $19.6 billion.

“We believe the bottom of the cycle is behind us,” said Lakshmi Mittal, the company’s chief executive. “As economic indicators are improving we are cautiously optimistic about the prospects for 2014.”

Sales in the North American flat steel division, which includes Dofasco, were up about 2 per cent to $4.9 billion, while EBITDA rose 68 per cent to $547 million. ArcelorMittal Dofasco is the largest producer of flat rolled steels in Canada.

The company’s Hamilton operation employs 5,200 and produces about 4.5 million net tons of steel a year.

ArcelorMittal Dofasco is also celebrating a World Steel Association award.

The company won in the Innovation of the Year category for its automated steelmaking process. This six-year project makes Dofasco home to the most automated basic oxygen furnace in the world, according to the company.

The project’s goal was to increase output of ultra-low carbon and advanced high-strength steels to meet future market demand.

“To have the most automated basic oxygen furnace in the world and the first such furnace that does not require manual sampling of the hot metal is a tremendous achievement,” said Sean Donnelly, vice-president manufacturing at ArcelorMittal Dofasco.

Donnelly said Hamilton staff are helping introduce the technology at other plants.

The World Steel Association includes 170 company members that represent 85 per cent of the world’s steel production.

Article courtesy of Meredith MacLeod, The Hamilton Spectator

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