ArcelorMittal will build a $380 million steel beam mill in Contrecoeur, Quebec, that could begin production as early as 2010. Beams are not produced in Canada so the plant probably will reduce imports from the U.S. Imports of beams into Canada from the U.S. were approximately 535,000 tons for the 12 months ending July 2007, according to the U.S. Census Bureau.

Even though ArcelorMittal has a reputation as a price-disciplined supplier, analyst Mike Willemse at CIBC World Markets in Toronto believes the new beam mill eventually could have some negative implications for structural beam prices in North America. According to Purchasingdata.com, structural beam prices have increased from an average of $323/ton in 2003 to an average of $730/ton in 2007—although much of the increases have been a result of higher scrap prices. "We have held the view that structural beam prices of over $750/ton were not sustainable longer term," writes Willemse, "so an eventual decline in structural beam prices should be expected."

In a related matter, ArcelorMittal also will restructure its steel production activities in Canada. Flat-rolled carbon steel production will be consolidated at the renamed ArcelorMittal Dofasco plant in Hamilton, Ontario, while long-product production will be centered at Contrecoeur. With this restructuring, the Contrecoeur site will end sheet-steel production by closing its hot-rolling mill on January 31 and its cold-rolling mill on February 29.

"It does not make business sense to have Contrecoeur compete with a sister company in the flat carbon segment while Dofasco has unused capacity," says Jos Jacqué, CEO of ArcelorMittal's North America long carbon steel business. Factors cited are the exchange rate, the cost of metallics and significant increases in iron ore and natural gas prices, plus the fact that Contrecoeur's equipment and facilities are no longer competitive.