Soo Today reported that just 6 weeks after spending USD 50 million to re commission its No 6 Blast Furnace, Essar Steel Algoma had to shut the facility down. No 6 is just one of a number of initiatives Essar Steel has had to put on the back burner in recent months, due to a downturn in steel demand.

Mr Madhu Vuppuluri President of Essar Americas during a media conference last week said that “It is likely to get worse before it gets better. But, it will get better again. And when it does, Essar will be looking at Sault Ste. Marie as a possible location for a wide diameter pipe mill to serve the oil and gas sectors.”

He said that "Oil at this point in time is USD 33 a barrel. There is no incentive. There is no point in getting involved in this at this point in time. But at the end of the day there has to be a total integration."

He said that "There has to be secure inputs and there has to be a captive consumer. In India we have a complete downstream. We own the service centers."

Mr Vuppuluri said that a pipe mill in Sault Ste. Marie could use material from Essar Steel Algoma to manufacture pipes and reduce dependence on imports. He said that "Ultimately, the idea is that you should have a fairly high percentage of your consumption captively held downstream units. And one should have a fairly large control on the imports so that you are protected against any volatility in the market."

Mr Vuppuluri was also clear that a pipe mill could be part of Essar Steel's long term planning, but first the company needs to get through this long, deep downturn. He said that "We were very keen to have it in Sault Ste. Marie, but it should be remembered that it is a very competitive business. You cannot have the mental frame where we will do it whatever be the cost."

(Sourced from SooToday.com)