ArcelorMittal Wins Long-Term Supply Deal for Coke Byproduct
01/17/2017 - ArcelorMittal’s U.S. division has struck up long-term agreements to sell coal tar to Koppers Inc., a manufacturer of wood-treatment chemicals and carbon compounds.
Contract terms were not disclosed, but Pittsburgh, Pa.-based Koppers said the deal will provide for a significant portion of its domestic raw material needs. Koppers uses coal tar to make creosote, an oil-based wood preservative used to treat railway crossties and to produce certain carbon compounds.
ArcelorMittal USA produces coal tar at its three byproduct coke plants in Pennsylvania, Ohio and Indiana. The agreement is to remain in place for an initial term of 10 years.
“These multi-year contracts are the latest step in our strategy to transform Koppers into the global leader in wood-based technologies. The agreements leverage the value of our vertically integrated supply model for treated crossties by adding long-term stability of creosote supply to the North American rail industry at a fair value while reducing our exposure to historically more volatile end-markets associated with crude oil and aluminum,” Koppers president and chief executive Leroy Ball said.
Separately, Koppers also announced on Tuesday that it has finalized a long-term lease of its coal tar distillation plant in Follansbee, W.Va. Koppers is leasing the plant to ORV Fuels LLC, which, over the next 24 months, will convert it to distill light crude.
However, Koppers said it will continue to use the site as a distribution terminal during the lease.
“The pending conversion of our Follansbee plant to a distribution terminal is the result of our strategy to have one fully integrated chemical processing plant in Stickney, Ill., in order to greatly improve our safety, environmental and operating performance. This agreement with ORV Fuels represents an important first step towards repurposing our distillation assets at Follansbee, which will allow us to minimize asset demolition and disposal costs, salvage jobs for the northern West Virginia panhandle and recoup some value over time for our assets," Ball said.
ArcelorMittal USA produces coal tar at its three byproduct coke plants in Pennsylvania, Ohio and Indiana. The agreement is to remain in place for an initial term of 10 years.
“These multi-year contracts are the latest step in our strategy to transform Koppers into the global leader in wood-based technologies. The agreements leverage the value of our vertically integrated supply model for treated crossties by adding long-term stability of creosote supply to the North American rail industry at a fair value while reducing our exposure to historically more volatile end-markets associated with crude oil and aluminum,” Koppers president and chief executive Leroy Ball said.
Separately, Koppers also announced on Tuesday that it has finalized a long-term lease of its coal tar distillation plant in Follansbee, W.Va. Koppers is leasing the plant to ORV Fuels LLC, which, over the next 24 months, will convert it to distill light crude.
However, Koppers said it will continue to use the site as a distribution terminal during the lease.
“The pending conversion of our Follansbee plant to a distribution terminal is the result of our strategy to have one fully integrated chemical processing plant in Stickney, Ill., in order to greatly improve our safety, environmental and operating performance. This agreement with ORV Fuels represents an important first step towards repurposing our distillation assets at Follansbee, which will allow us to minimize asset demolition and disposal costs, salvage jobs for the northern West Virginia panhandle and recoup some value over time for our assets," Ball said.
