US Steel and Severstal to dissolve Double Eagle joint venture
The company cited a decline in market demand for electro-galvanized products and a shift toward hot-dip coated technology
DEARBORN, Mich.—Steel producer Severstal North America and US Steel have dissolved their Dearborn, Mich.-based Double Eagle Steel Coating Co. joint venture.
Double Eagle produced electro-galvanized steel for the automotive sector from a factory located near Ford’s Rouge assembly facility.
Severstal said a significant decline in the market demand for electro-galvanized products and a shift toward new hot-dip coated technology was the main reason for the decision.
“After a thorough review of the business trends and conditions by the Board of Directors, the parties mutually concluded that the economic viability of electro-galvanized production at Double Eagle could no longer be maintained,” said Sergei Kuznetsov, CEO of Severstal North America.
Severstal Dearborn launched its new $285-million hot dip galvanizing line (HDGL) last year and the company expects to transition from electro-galvanized product to hot dip galvanized by the first quarter of 2014.
Severstal North America is owned by Russian mining and steel giant OAO Severstal based in the Vologda region of Russia.