(Adds CEO Longhi's comments on automotive industry)
By Krista Hughes
WASHINGTON, March 25 United States Steel Corp
could replace another one of its older blast furnaces with
an electric arc furnace, Chief Executive Mario Longhi told
Reuters on Tuesday.
U.S. Steel said in January that it was applying for permits
to build an electric arc furnace to replace the blast furnace at
its Fairfield, Alabama, facility, part of a push to cut costs.
"We are moving ahead with the first one," Longhi said. "And
there is a lot of analysis going on, given the fact that we have
plenty of blast furnaces, to see where, if, when the next one
could be replaced by another electric arc furnace."
U.S. Steel's profitable rival Nucor Corp has long
specialized in steelmaking with electric arc furnaces, often
called mini-mills. U.S. Steel and Nucor are the biggest
A sustained shift towards mini-mills would be a big change
in strategy for U.S. Steel, which has generally focused on
maintaining its fleet of blast furnaces.
Electric arc furnaces can use steel scrap, rather than iron
ore, to make steel. They can cut costs associated with
transporting raw materials, and insulate steelmakers from
increases in the price of iron ore and coal.
Longhi declined to name blast furnaces that could be
replaced, but said there are several options: "One factor is
what is the age of a certain blast furnace, when it is going to
come up for a massive reline," he said.
Relining a blast furnace can cost $100 million or more.
"ASLEEP AT THE WHEEL"
On the growing use of aluminum in the automotive industry,
Longhi, who earlier in his career spent 23 years at aluminum
maker Alcoa Inc, was cautious.
"I would say aluminum has been very hard at work," he said.
"I think steel has been somewhat asleep at the wheel."
He said the steel industry is behind on research and
development, and that U.S. Steel is "intensifying" its work in
Automakers' demand for aluminum, which is more expensive
than conventional steel but also lighter, is growing rapidly as
manufacturers push to improve fuel efficiency.
(Writing by Allison Martell; Editing by Peter Galloway)