MONTPELIER, Iowa — The parent company of IPSCO Steel Inc. plans to spend $150 million to $250 million, building a heat-treating facility to make stronger steel at either the Montpelier mill or another mill in Mobile, Ala.
A final decision will be made based upon site-specific issues such as regulatory approvals, Olof Faxander, chief executive of SSAB Svenskt Stål AB, a Swedish company, said in a statement. No date for that decision has yet been set.
“This is a step to further meet the strong and increasing global demand for quenched and tempered steels,” he said. “The investment enables us to continue to develop the strong production base we now have in the US. This will strengthen our strategy to be the global leader in high-strength steel.”
If selected, the expansion could bring 100 new jobs to the Montpelier plant. IPSCO began production at the plant in 1997 and produces about 200 tons of liquid steel per hour.
The $500 million steel mill has a workforce of 570 company and contracted employees, and IPSCO officials estimate it has created about 2,500 spin-off jobs.
SSAB has 400 employees and 350 on-site contractors at the mill in Alabama.
Faxander said the company is facing soaring costs for iron ore, scrap metal and coal, the key ingredients in steel, and said SSAB will have to continue to raise prices during the year.
Profit margins at the two American mills suffered, he said, because a 20 percent price increase in their key raw material — scrap metal — is already affecting the company. SSAB has stores of coal and ore that it bought at lower prices, although later in the year it will face steep rises in those commodities.
Still, company officials said they believe steel demand worldwide will remain strong, and that they can raise prices enough to maintain profits during the year. ‘’There is a quite strong discipline within the industry to make sure price increases are achieved,” Faxander said
The Mobile (Ala.) Press-Register contributed to this story.