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BlueScope to Restart No. 5 Blast Furnace at Port Kembla

07/17/2009 - BlueScope Steel announces plans to restart its newly relined No. 5 Blast Furnace at the Port Kembla Steelworks.

BlueScope Steel announced plans to restart its No. 5 Blast Furnace at the Port Kembla Steelworks.
 
All major elements of the No. 5 Blast Furnace reline, other than hot commissioning, have been successfully completed. The capital cost estimate for the reline, $372 million, includes approximately $20 million still to be spent to finalize the works and restart the furnace.
 
The company said it expects No. 5 Blast Furnace to be blown-in toward the end of August 2009, with both Blast Furnaces operating at a combined annualized capacity of at least 75% of rated capacity by September 2009. Port Kembla’s No.6 Blast Furnace will continue to operate at 100% of capacity—its current level of operation—until the No.5 Blast Furnace is blown in. The company said it would later ramp up total production of the two blast furnaces as demand dictates.
 
The company said work was also progressing well on the Sinter Plant Upgrade Project, which had been carried out concurrently with the reline. Production recommenced at the end of June with production being ramped up to enable it to supply Blast Furnace operations as needed over the coming months.
 
The company said its decision to restart Port Kembla’s No. 5 Blast Furnace was based on a combination of market factors, including an improvement in market volumes in May/June, de-stocking in global steel markets and a recent increase in international hot rolled coil prices. BlueScope noted that demand through year-end had also increased from external customers in Asia as well as from the company’s offshore affiliates in Asia and North America.
 
Although the Port Kembla Steelworks production ramp-up profile and market developments are encouraging, overall market conditions remain challenging. While results for the financial year ended June 30, 2009 have not been finalized, preliminary indications (subject to audit review) are that the company will likely record a small net loss after tax for FY2009, with second-half losses offsetting the previously disclosed first half profit.
 
BlueScope Steel also commented on the Australian Government's Carbon Pollution Reduction Scheme (CPRS), noting its strong concern that (in the absence of a global approach to carbon emissions regulation) the CPRS will likely impair the trade competitiveness of its Australian iron and steelmaking operations, without necessarily improving the global environmental outcome.
 
The Company continues to seek a number of changes to the CPRS to maintain the competitiveness of the Australian steel industry, as detailed below, all of which are yet to be resolved:
 
  • Inclusion of the globally traded product - hot rolled coil - in the Government's proposed assistance program
  • Measures to reduce the pass-through of emissions costs from suppliers, particularly those of metallurgical coal
  • Ensuring assistance continues until comparable carbon constraints apply in competitor countries