July accident at Faircrest steel plant stalling TimkenSteel production
CANTON – A July 26 accident at the Faircrest Steel Mill has hampered TimkenSteel's production and melt shop operations.
Company executives told stock analysts on Friday that the incident still is being investigated and equipment still is being repaired. Melt shop operations — the process of melting scrap metals to make new steel ― have been stalled by the investigation and repairs, said Mike Williams, president and chief executive officer.
It's expected that melt shop operations won't resume until mid-August, he said.
"We're going to be back up and running very soon," Williams told analysts.
Three men were injured in the accident, which was described as an explosion. One of the injured workers remains hospitalized at the MetroHealth Medical Center Burn Unit in Cleveland.
Second quarter income, sales rise
Williams discussed the situation during a conference call to review the company's second quarter financial results. TimkenSteel reported a profit, and Williams said he doesn't expect the July 27 accident to have a significant impact on financial results for the rest of the year.
TimkenSteel reported net income of $74.5 million, of $1.60 per share, for the second quarter ended June 30, a 38% jump compared with net income of $54 million last year. Net sales rose 27% to $415.7 million compared with $327.3 million in the 2021 second quarter.
Through the first half of 2022, net income has jumped 75% to $111.6 million, or $2.40 per share, from $63.8 million, or $1.40 per share. Net sales topped $767.7 million, a 27.7% increase from $600.9 million through the first six months last year.
The company benefited from higher prices, and by supplying targeted end markets, Williams said. The company is focused on high-value end markets, including defense, renewable energy and electric vehicles.
WIlliams said the company continues to add contracts to supply parts for electric vehicles. He expects that market to grow in the coming years as automakers move away from gasoline-fueled engines and begin building more electric vehicles.
But the company has seen a slip in sales with automotive customers because of ongoing supply chain problems. The company estimates that mobile segment sales are down about $13 million so far this year. The company expects supplies will stabilize later this year, with improvements possible next year.
Industrial shipments increased during the second quarter, Williams said. The company has seen "robust demand" from the energy market because of increased oil and gas drilling, as well as completion of wells.
Williams: Safety is paramount
Williams was confident the Faircrest melt shop would be producing steel in a few weeks. Until then TimkenSteel is supplying customers by processing steel from inventory it had, as well as some steel supplied by a partner, he said.
Faircrest has TimkenSteel's only operating melt shop. In 2021, the company idled its melt shop at the Harrison Steel mill. Kristopher Westbrooks, executive vice president and chief financial officer, told analysts that while the company waits for repairs at Faircrest, it expects a negative impact on melt utilization and manufacturing costs.
Williams said safety is paramount at TimkenSteel and said the company launched safety programs earlier this year.
"I find our employees to be dedicated, flexible and resilient. Unfortunately that resiliency was tested last week," Williams told analysts as the discussion began. Later, he thanked employees for their hard work and added that TimkenSteel is "committed to taking tangible actions to improve our safety culture."
The Occupational Safety and Health Administration is investigating the accident.
At the end of June, the federal agency fined TimkenSteel $315,000 because of a fatality in December at the Gambrinus Steel Mill, and — citing past accidents ― placed the company in OSHA's serious violator program.
Reach Edd at 330-580-8484 or edd.pritchard@cantonrep.com On Twitter: @epritchardREP
This article originally appeared on The Repository: TimkenSteel melt operations stalled by repairs, investigation
