USX CORPORATION

Anish Khandelwal 18/009

Manpreet Singh 18/145

Puroo Soni 18/158

Sanjit Sahoo 18/164

Sujit Kumar 18/170

COMPANY BACKGROUND

• Assembled in 1901 as the United States Steel Corporation through a series of mergers by JP Morgan and Judge Elbert Gary

• Core was Pittsburgh based Carnegie Steel Corporation

• A fully integrated company where supplies of iron ore, limestone, coal were extracted by mining divisions and transported to steel mills

• In 1917, USS was the first corporation inn America to burst through $1bn revenue barrier and employed 168000 workers

• In 1990, USS placed 2 other mills with capacity for 2.6mn tons of finished steel products in Ohio and California into JVs with Japan’s Kobe Steel and Korea’s Pohang Steel

• Currently producing hot and cold rolled sheets, strip and tin products

STEEL (FLAT) MANUFACTURING PROCESS

Reaction of iron ore with oxygen, limestone, coke in blast furnace

Remove carbon and other impurities by adding small amounts of alloying metals

Slabs were rolled into desired shapes – Hot Rolling technology

Step 1

Step 2

Step 4

Step 3

STEEL (FLAT) MANUFACTURING PROCESS (CONT..)

Blast furnace

Basic Oxygen

Converter

Ingot Molds

1-stand 44’’

slabbing mill

Roughing Mill

6-stand Finishing

Mill

Continuous Cold

Rolling Mill

Temper/Skin Pass

Mill

Hot dip - final

product

Rail transport

Capital Cost

[CSP> Thick slab]

Flexibility

[CSP> Thick slab]

Criteria for Evaluation

Criteria for Evaluation

Current Plan

Upgradation of the Mon Valley steelmaking

complex, as it required large modernization

investments

Keith Kappmeyer just about to sign the

agreement

$600 million investment to be made in 2 phases

1st phase : Design, building & installation of a continuous slab caster

at Edgar Thompson works, costing $250

million

2nd phase: Upgrading the Irvin hot rolling

mill, with an approximate cost of

$300 million

CONTINUOUS THIN-SLAB CASTING

Not yet commercially

proven

Being tried by Nucor Steel, the largest minimill

steelmaker at its new greenfield

site

Would require the caster to run at 4

to 5 times the conventional

speed

Two major innovations as part of Compact Strip Production

Coupling was a necessity, not an

option

Capable of reducing steel

thickness by 50% for fine grained

steel

Continuous thin slab casting

Coupling of rolling & continuous casting

Technological Process Alternative

18/04/2023

USX Corporation : One of the world’s premier integrated steel producers

Rapidly changing process technology in the steel industry

Increasing competition from “minimill” steel manufacturers, who enjoy the minimill cost advantage

Important to assure that USS maintains a strong competitive position in the hotly contested North American market for flat rolled steel products

Current investment would force USS to operate with the installed technology for at least a decade, before it considers replacement again

Situation Analysis

EVALUATION OF PROCESS ALTERNATIVES

Reduces final cost of sheet and strip steel productionCuts energy consumption by more than half during rolling process, cue to couplingLower capital costs involvedUsed equipment technically similar to proven thick slab equipment

Option still not commercially provenAdaptation of CSP to USS’s existing customer base would be difficultIssue in the conceptual configuration of CSP at Mon Valley, due to the physical distance between E.T. and Irvin MillsInvesting in CSP would cause USS to commit to the entire project at the outsetOperating cost savings through CSP were not encouraging

Posi

tives

- C

SP

Neg

ativ

es- C

SP

STEPS TO BE TAKEN FOR IMPLEMENTING CSP TECHNOLOGY

Install new thin-slab caster & build a new rolling mill at E.T. works

Design special rail cars to transport molten steel to Irvin

Install electric arc furnace at Irvin, to feed CSP system

Transport cooled thin slabs by rail, to re-heat & roll at Irvin

Build a new greenfield site with CSP facility

  1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999Total Market (mt) 85.5 91.4 63.8 72.2 83.7 81.4 77.5 82.9 87.9 85.7                   

USS's market Share (%) 21% 20% 16% 18% 17% 19% 12% 13% 16% 14%                   USS's Market (mt) 17.8 17.8 10.3 12.6 14.2 15.5 9.1 10.8 13.8 12.2                   Sheet & Strip %   45%    64%    68% 62% 69%                   

USS's Sheet & Strip (mt)   8.0    9.1    7.3 8.6 8.4                   

Total Market of Sheet & Strip(mt) 38.1 41.2 32.4 41.8 46.7 45.6 44.6 46.9 47.4 47.2 48.3 49.4 50.6 51.8 52.9 54.2 55.4 56.7 58.0 59.4

Market share of USS in Sheet & Strip  

19.5%   

19.5%   

15.6%

18.1%

17.8% 18% 19% 19% 20% 20% 21% 21% 22% 22% 23%

USS's required Output                     8.84 9.29 9.75

10.24

10.74

11.26

11.80

12.35

12.93

13.52

SUFFICIENT CAPACITY TO CATER TO DEMAND

Microsoft Excel Worksheet

Required capacity in 1999=13.50 MTCurrent Capacity after upgradation=11+2.6=13.6 MT

RECOMMENDATION

Implement the first phase at E.T works to appease the workers and wait for the CSP to evolve

If CSP succeeds, start an electric furnace at Irvin mill without going to second phase

Else go to Phase 2

SIG

N

TH

E

PR

OPO

SA

L

THANK YOU