BlueScope's plans to boost production at its United States mill shouldn't have any effect on the amount of Port Kembla-made steel exported to that country.
During Monday's announcement of a $1.015 billion full-year profit, BlueScope CEO Mark Vassella announced plans to expand the capacity of its North Star steel mill in Ohio – on the eastern side of the country.
BlueScope will spend $US700 million to upgrade the plant and remove production bottlenecks to allow it to make an extra 500,000 metric tonnes of steel a year.
"This project fits in perfectly with our strategy," Mr Vassella said.
"It offers long-term sustainable earnings from a high-quality asset."
Mr Vassella said increased output at North Star would not have any flow-through effects for Port Kembla.
BlueScope also has a business on the west coast of the US in Steelscape.
Port Kembla sends around 300,000 tonnes of hot rolled coil each year to Steelscape outlets in California and Washington, where it is turned into Colorbond.
Mr Vassella said BlueScope wasn't looking to have its North Star mill make the steel for Steelscape, reducing the output at Port Kembla.
"We will still send some steel to the west coast of the United States," Mr Vassella said.
"North Star's expansion and where it sells its product all happens within 300 miles of where they're located right up in the north-east of the country, in Ohio. So it's very much a regional or a localised business.
"That investment and that expansion doesn't have any impact on what we do with the Steelscape business."
Also in play is the surprising reality that it's cheaper for BlueScope to send steel from Port Kembla to the west coast of the United States than it is to make it on the country's east coast and send it across the country.
It means the west coast steel market is import-driven.
Mr Vassella envisaged the extra steel created via the North Star upgrade will end up being sold in that local market.
(Ukrainian metal)
