BlueScope Steel Goes Ahead with $1 Billion Expansion of North Star Mill in Ohio

SEATTLE (Scrap Monster): Australian BlueScope Steel announced its decision to go ahead with the proposed $1 billion expansion of its North Star steel mill in Ohio. The expanded facility is expected to be fully up and running by 2023.

According to the company, this is the largest capital investment the steelmaker would ever make. The cheap energy prices in the U.S., coupled with President’s policies in support of the country’s manufacturing sector have prompted the company to go ahead with the expansion, which is expected to deliver annual returns of approximately 15%. The North Star mill capacity is likely to expand by nearly 40%, as a result of the investment, it noted.

Mr. Vasella, Chief Executive, BlueScope noted that the Australian manufacturing sector currently is faced with several headwinds including high energy prices. The high energy prices in the country have badly impacted many Australian manufacturers, he said. The energy prices in the U.S. are only around one-third of those in Australia, he added.

Meantime, the company reported net profit of A$1.02 billion for the year to June 30, compared with A$1.57 billion a year earlier. The weaker commodity steel spreads in its Australia and U.S. steel businesses would likely result in 45% decline in the company’s underlying earnings before interest and tax (EBIT) for the current half of the fiscal year, as compared with the second half of fiscal 2019.