CLEVELAND, Ohio — Capping off nearly half a billion dollars in steel investments in Northeast Ohio in the past two years, Charter Steel next month plans to expand its electric arc furnace in Cuyahoga Heights.
Charter sales manager Jack Lynch said the expansion will increase capacity by about 25 percent. The plant employs about 330 workers.
The Charter expansion is the latest in a long string of major steel investments made in the region since the beginning of last year — $100 million to expand U.S. Steel operations in Lorain, $85 million at Republic Steel’s Lorain plant, $225 million for a massive expansion at Timken’s Faircrest Steel plant near Canton and $57 million for a Youngstown steel processing plant.
Although the Saukville, Wis.-based Charter Steel won’t add any new jobs in Cleveland as part of the expansion, some other steel producers like ArcelorMittal and U.S. Steel did increase their workforce.
Lynch said the Charter expansion came about because of increased demand from the automakers, construction equipment companies and construction materials companies it serves. Most of the demand has been on the vehicle side as construction remains depressed, but he said Charter expects all of its markets to expand over the next few years. The company declined to say how much it was spending on the project.
“We just see a general need for more capacity over time,” Lynch said.
Improving auto sales also prompted ArcelorMittal to boost production at its Cleveland steel plant earlier this year. The company reopened portions of the plant that it shut down in 2008 as the global economy was collapsing. Though it did not require a new investment, reopening that portion of the plant created 150 new jobs.
Company spokeswoman Mary Beth Holdford said that for the first time since the emergency shutdowns in 2008, “all operations at ArcelorMittal Cleveland are up and running.”
Though it did not play a role in Charter’s planned expansion, the biggest driver behind Ohio’s recent steel boom has been shale gas.
Nancy Gravat, spokeswoman for American Iron and Steel Institute, said the explosion of the shale gas industry in recent years has been great for steel on two levels.
“Natural gas provides 30 to 35 percent of the industry’s fuel. Having this access to reliable, available energy at a low cost is fantastic,” Gravat said. And the increased demand for steel pipes and tubes is an added benefit.
In Youngstown, V&M announced late last year that it would add a threading operation to its steel mill. The mill already specialized in oil and gas pipelines, so adding threading operations makes it easier to ship out pipes that can be screwed together.
U.S. Steel finished an expansion last year in Lorain to boost pipe production for gas exploration companies, prompting its next-door neighbor Republic Steel to invest in its facilities this year.
In Canton, Timken’s Faircrest Steel plant focuses on high-tech alloys used in specialty equipment, not pipelines like U.S. Steel and V&M Star. But Timken officials expect to see big steel orders from drilling equipment companies and other industrial customers.