JSW Steel USA has put on hold its plans to construct a new electric arc furnace at its plate mill in Baytown, the company’s US CEO said.
“While JSW USA is fully underway in modernizing the plate mill at Baytown, Texas, given the current market conditions and the prevailing policy environment, the company has for now decided to put on hold the backward integration project of installing an electric arc furnace and slab caster at Baytown,” JSW USA CEO John Hritz said. “JSW USA, however, remains committed to being a fully melt and manufactured enterprise in the US.”
JSW USA, a division of Mumbai-based parent company JSW Group, said in March 2018 it planned to invest $500 million at its Baytown mill in a multi-phase project that would include the installation of an electric arc furnace.
The announcement came at a time of heightened trade tensions following US President Donald Trump’s implementation of a 25% tariff on steel imports.
Less than a year after Hritz lauded U.S. metal tariffs for aiding the steel industry, the company is suing because the steelmaker’s request for 12 exemptions for steel slabs imports from India and Mexico.
JSW has also said it relies on imports of these materials from India and Mexico because the U.S. doesn’t produce steel slab of sufficient quality or quantity.
The 12 requested exemptions were for steel slab imports from JSW Steel’s operations in India and from ArcelorMittal’s Mexico operations. The exclusion requests for imported slabs from India were denied in April, while the Mexican imports exclusions requests were denied in May.
Less than a year ago, JSW Steel broke ground on a full-scale modernization and expansion project at its Baytown location.
The steelmaker is investing up to $500 million to install the most technologically advanced hot end facilities in the world that is said to set a new industry standard.
To get the project underway, JSW USA signed a memorandum last year with the governor’s office, under which the governor approved a Texas Enterprise grant worth $3.4 million for expansion.
JSW USA, a wholly-owned subsidiary of JSW Group — an $11 billion company headquartered in India — will use $150 million to improve and modernize the Baytown plant. The rest of the $500 million will be used for expansion.
Once the expansion is complete, JSW would no longer need to bring slabs from outside of the country, as it could make all of the slabs at the Baytown facility.
However, currently JSW’s Baytown mill is dependent on imported slabs to produce its plate and pipe products.