UPDATE 1-Thyssen to bring forward US "meltshop" plant-sources

* Plans to discuss stainless overhaul on Nov. 26 – sources

* To shut down 1 out of 4 German stainless plants

* Plans around 400 cuts of 550 jobs at Benrath plant

* ThyssenKrupp shares rise 2.7 pct, outpace blue chips

(Adds background, changes dateline from FRANKFURT)

by Tom Kaeckenhoff and Marilyn Gerlach

FRANKFURT/DUESSELDORF, Nov 24 (BestGrowthStock) – Thyssenkrupp AG
(TKAG.DE: ) will bring forward construction of a cost-saving
“meltshop” plant in the United States to help it compete against
rivals, four sources told Reuters on Wednesday.

The German steel maker is also considering a major revamp of
its weak stainless business.

Construction in the United States of the meltshop, which
would allow ThyssenKrupp to melt scrap metals and avoid having
to import stainless products, has been estimated by some
analysts to cost around 600 million euros ($803.6 million).

But it would enable the German steel maker to supply
material to its $1.4 billion steel plant in Alabama, rather than
importing it from Germany, Italy and Mexico. The Alabama plant
started production last month with one cold rolling mill, which
will initially produce 100,000 metric tonnes annually.

Construction of the meltshop will be brought forward to
enable production in 2013 instead of 2014, the sources said.

“Moving forward the construction will allow the company to
save on transportation costs and be closer to its market, thus
better competing against (Acerinox-owned) NAS,” one of the
sources said.

Analysts said they expected ThyssenKrupp could save around
90 percent of shipping and handling costs to North America, or
around 100 million euros per year. The company’s shares rose 2.7
percent against a 1.8 percent rise in the DAX index (.GDAXI: ).


Possible U.S. import taxes are another factor. “An important
aspect also is avoiding the U.S. anti-dumping taxes,” said
analyst Hermann Reith of BHF Bank.

Some analysts said the U.S. government has initiated a
review of anti-dumping duty orders on some stainless steel sheet
and strip-in coils from other countries including Germany, Italy
and Mexico.

A supervisory board meeting on Nov. 26 of Europe’s biggest
stainless steel producer is expected to approve a capital
expenditure plan which allows a new timetable, the sources said.

North American Stainless (NAS) is a unit of Spain’s Acerinox
(ACX.MC: ), the global Nr. 1 stainless steel producer. Another
major U.S. rival is AK Steel (AKS.N: ).

Sources also said the board will discuss other efficiency
measures that include shutting down Benrath, one of four
stainless plants in Germany, and the cutting of up to 400 jobs
from Benrath’s 550-strong workforce.

The board is also expected to approve plans on capital
expenditure including 250 million euros of investment for the
Benrath restructuring, the sources said.

The Benrath capacity will be transferred to Krefeld, which
will be expanded into an integrated stainless plant, allowing
Thyssen to adopt the single-site concept that allowed rivals
such as Acerinox and Outokumpu (OUT1V.HE: ) produce at lower

Analysts expect global demand and prices for stainless steel
to rise next year, bolstered by growth in Asia, recovery in
mature economies and less destocking by distributors.
(Editing by David Holmes)
($1=.7466 Euro)

UPDATE 1-Thyssen to bring forward US "meltshop" plant-sources