Illinois Metallurgical Coke Project Misses Window of Opportunity

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). With Chinese metallurgical coke prices declining, what once looked like a promising project, now looks less and less likely it will ever come to fruition. E&C Firm, Graycor (Homewood, Illinois) provided lump sum bid packages for the project. After a lengthy permitting process, the owners of Chicago Coke Company have approved construction permits in hand and are ready to start construction on a rebuild of the former LTV coke plant in Chicago, Illinois, at 116th Street and Burley Avenue. However, the project has yet to attract an anchor partner, and is unlikely to proceed as a merchant project in today’s metallurgical coke market.

Initially, International Steel Group (ISG-now Mittal) had an agreement with the Chicago Coke Company to purchase the project, but when ISG was acquired by Mittal that deal was dropped for other options. ISG had gone as far as to order the refractory brick for the coke ovens at the site, which are sitting in crates in Germany ready to be shipped. Owners of the fully permitted project, the Beemsterboer family who operate Calumet Transfer Company in Illinois, are looking for a customer. But due to a short-term price decrease in metallurgical coke prices, the project is not as attractive as it was a year ago. Industry sources are forecasting an excess of coke on the market in 2006, so the short-term prospects for the industry are down. That could change as planned steel mills in China come on-line.

Calumet Transfer purchased the LTV property in 2002. Shortly thereafter, the U.S. steel industry began to consolidate, recovering from a period of mill shutdowns. ISG, a prime example of the renewed success of the U.S. steel industry, had an interest in shoring up metallurgical coke supplies, which became scarce due to plant closures and Asia’s growth requirements. Permitting delays ultimately doomed the project.

Other companies, including Russian steel producer Severstahl, have shown interest in the property, even going as far as to perform due diligence, but decided not to pursue the project.

Click on the image at right for details on Industrialinfo.com's 2005 US & Canadian Steel Mill Wall Map, featuring operational and under development steel mills and metallurgical coke plants.

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