Luxembourg-based ArcelorMittal has updated the progress of a major reorganization at its Indiana Harbor operation in East Chicago. In its quarterly earnings report, which showed a third quarter return to profitability, the steel maker says the "footprint optimization" is set to be fully complete in 2018.
The efforts include idling parts of the massive plant such as an aluminize line, a hot strip mill, a continuous galvanizing line and steel shop. It says approximately $200 million is being invested into projects including adding a new caster, which is set to be complete by the end of the year, and restoring the hot strip mill.
Chief Executive Officer Lakshmi Mittal says "looking ahead, while real demand remains stable, we will be impacted by the unexpected significant increase in the price of coal. While expectations are for steel prices to align with the increased costs, in the interim the higher coal price will impact steel spreads and fourth quarter performance." He continues "overcapacity remains a concern, reinforcing the importance of a comprehensive trade response to minimise the impact of unfair trade across all product categories. But overall we remain pleased with the progress we have made this year. We are supported by a strong balance sheet, we have seen positive price momentum in our main markets and the organisation is fully aligned to successfully implement our five year strategic plan, Action 2020."
Despite turning a net income of $680 million in the third quarter, compared to a loss of $711 million at the same time last year, ArcelorMittal expects continued lower prices of steel in the U.S. and rising metallurgical coal prices to cause profits to decline in the final quarter of the year.
The company also announced the launch of new grades of high-strength steel that will be produced in the U.S. and Europe.
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Editor’s note: A previous version mistakenly identified the reorganization as taking place at the Ports of Indiana-Burns Harbor operation.