Middletown Journal reported that with the local SunCoke Energy plant set to be complete next year, AK Steel Corporation officials said the company’s need for the raw material it will produce couldn’t come at a better time as it is facing up to USD 50 million repairs for its coking operations in Ashland.
Raw material costs for iron ore and coke are soaring. AK Steel spokesman Mr Alan McCoy said iron ore alone has increased more than 98% from last year, contributing heavily to the company’s USD 59.2 million loss in the third quarter.
At a recent SunCoke Community Advisory Panel meeting in Middletown, Mr McCoy said negotiating coke contracts will become even more important, not just due to demand, but also because of possible repairs that may need to be made to the company’s coking operations in Ashland.
According to the company’s 10 Q filing with the US Securities and Exchange Commission, the Ashland Works plant received Notices of Violation in July 2007 and December 2008 in connection with the coke plant there involving pushing and combustion stack limits.
AK is working with the Environmental Protection Agency in an attempt to resolve the issues; however, the company said it cannot reliably estimate the costs, if any, associated with any potentially required operational changes at the batteries.
Mr McCoy said that "That could make producing coke from that battery not economically feasible."
The steelmaker receives about 1.8 million tonnes of coke annually from what is produced at the Middletown and Ashland coke batteries and what AK purchases from SunCoke’s Haverhill facility in Franklin Furnace, Ohio. Mr McCoy said the company needs between 1.6 million tons and 2.2 million tons, depending on the market.
Mr McCoy said that "Ashland’s future is uncertain at this point, and it’s just a calculation for why we need coke. I will tell you the Middletown plant — I play guitar — it's like a Fender Stratocaster: it’s old, but it still works great."
SunCoke is expected to begin producing coke in September 2011. Company officials said it will take up to four months for the plant to begin producing at capacity.
