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Work at Allegheny Technologies Inc.’s new hot rolling and processing facility in Harrison would double under a joint venture the company is forming with a Chinese stainless steel producer.

ATI also would restart its idled finishing facility in Midland, Beaver County, creating about 100 manufacturing jobs there.

ATI announced an agreement to form a joint venture with Yongqing Limited Liability Co., an affiliate company of Tsingshan Group.

Founded in 1998, Tsingshan is the world’s largest stainless steel producer.

Formation of the joint venture, “Allegheny & Tsingshan Stainless,” is subject to regulatory and anti-trust clearances, which are expected by the first quarter of 2018.

The venture will make and sell 60-inch-wide stainless steel sheets.

The first shipments are expected early next year.

ATI and Tsingshan had been in talks for almost a year, according to ATI spokesman Dan Greenfield.

For Tsingshan, the joint venture gives it access to the United States market through ATI without needing to build a new facility in the United States, Greenfield said.

The deal would give ATI Flat Rolled Products a cost-effective way to re-enter the 60-inch-wide stainless sheet business, which it exited in 2016.

Opened in 2015, the $1.2 billion hot rolling and processing facility (HRPF) in Harrison most recently has been running at 30 percent capacity, Greenfield said. With the new agreement, it would get closer to 60 percent capacity around 2019.

About 650 people work there.

“Any better utilization of the HRPF is good for the facility and for the community,” Greenfield said. “It gives us the opportunity to best utilize that facility and continue to grow the business.”

Analyst: Profits questionable

But it’s hard to say how much profit the venture will produce, especially in light of ATI’s investment in what it calls its Brackenridge facility, said industry analyst John Tumazos, a Wilkinsburg native and owner and CEO of Very Independent Research in New Jersey.

“I wouldn’t call it a grand slam home run,” he said. “The Brackenridge hot strip mill cost $1.2 billion to build, so the profit margin they’re projecting of $20 million to $35 million from the incremental rolling at Brackenridge is not a big financial return on the assets employed. It’s, like, a couple percent.

“It’s not going to hurt Allegheny,” he said. “It’s something. I might have dreamed for more.”

The hot rolling and processing facility is a powerful mill with extraordinary capabilities, which Tumazos said could handle more complex, and more profitable, metals.

“Those markets take a while to develop,” he said.

The joint venture will compete primarily with a Spanish-owned mill in Kentucky and a Finnish-owned mill in Alabama, Tumazos said.

Rather than displace the two non-union players, he expects a battle for price and market share.

“Every distributor who buys stainless steel is happy that he’s going to be able to buy from the Midland cold mill, via Brackenridge, via Indonesia,” Tumazos said. “I don’t think this deal makes value for Allegheny as much as it destroys value for the competitors in Alabama and Kentucky.

“It will knock down the prices and give the people down South a lot of indigestion.”

From Indonesia to Harrison

Slabs will arrive at the Harrison plant by sea and rail from Tsingshan’s $5 billion facility in Indonesia, Greenfield said. Here, the slabs will be hot rolled from slabs into coils.

“Every pound of stainless that comes through this agreement will run through the hot rolling and processing facility,” Greenfield said.

Coils then would be taken by rail to the finishing facility in Midland, which will be owned and operated by the joint venture, he said. The finishing line had been idled in 2016.

The United Steelworkers said it welcomes the restart of the Midland facility through the joint venture.

“We have reached an agreement with this new company regarding wages, staffing and working conditions under which the plant will operate,” said Tom Conway, USW international vice president and chair of the union’s ATI bargaining committee.

“We welcome the return of a significant number of USW jobs into the Midland community and, while we would have preferred to have made the slabs to support this operation in Midland as well, we recognize the reality to the stainless markets and that progress here can be incremental,” Conway said.

Brian C. Rittmeyer is a Tribune-Review staff writer. Reach him at 724-226-4701, brittmeyer@tribweb.com or via Twitter @BCRittmeyer.