IPSCO's Alabama Steelworks Commences Start-Up

Liquid steel poured for the first time

Lisle, Illinois, 22 January 2001, IPSCO Inc. (NYSE/TSE:IPS) announced today that its subsidiary IPSCO Steel (Alabama) Inc. had successfully produced the first liquid steel at its new 1,250,000 tons per annum Mobile County steelworks. The liquid steel was successfully processed into 165 tons of slabs at the continuous caster at 7:25 PM, Friday, January 19, 2001.

Construction of the facility was approved by IPSCO’s Board of Directors in December 1998 and site preparation commenced in April 1999. Work at the site has been uninterrupted since that date culminating in today’s initial steelmaking, a mere 20 months later.

The $425 million facility will produce discrete plate and coiled hot rolled plate and near plate used in such diverse applications as building and construction, bridges, barges, railcars, storage tanks, machinery and equipment, agricultural implements, and pipemaking. "Some people are afraid that this new plant will result in the oversupply of discrete plate in the marketplace,” said John Tulloch, Senior Vice President and Chief Commercial Officer, “What they fail to appreciate is the multipurpose capability of our rolling mills. Unlike Bethlehem, Nucor, and U.S. Steel who operate single purpose plate mills IPSCO can produce both hot rolled coil and discrete plate on the same mill. This permits us to soak up our excess capacity in the form of hot rolled coil. As the demand for discrete plate increases year by year we will naturally increase our output in that category by producing less coil. I wouldn’t expect to see others set up to produce discrete plate because of our built in ability to increase in small increments as needed.”

IPSCO said that it can produce hot rolled coil up to 96 inches wide that serves primarily as feedstock for its coil processing facilities in Houston, St. Paul, Toronto, Surrey (B.C.), and Regina (SK). Other outlets for its hot rolled coil are IPSCO’s fully owned pipemills in Arkansas, Nebraska, Iowa, as well as in western Canada, and sales to third parties.

The addition of the Mobile Steelworks brings IPSCO’s annual steel making capacity to 3,500,000 tons per annum, its other steelworks being located in Montpelier, Iowa and Regina, Saskatchewan.

IPSCO said it continues to be concerned with the level of dump priced steel imports. Steel consumption in the United States and Canada has doubled since 1983 but imports are over two and a half times their 1983 levels, the company said. “It seems to be a one way street, other countries deliberately maintain capacity excess to their needs even in times of high demand, and when their domestic needs fall they just ship more and more to North America with no regard to their own costs. But their own markets tend to be shielded from international competition by a host of subtle and not so subtle barriers,” Tulloch said. “They are stealing our jobs and a fair return for our investors. While IPSCO has remained profitable our numbers are currently more like low return bonds than the returns investors expect on equity. If the United States does not wish to become fully dependent on such a crucial economic building block as steel we shall have to toughen up not only the way we administer our current trade laws but modify them to take full advantage of our rights under the World Trade Organization,” he added.

Installation continues on the rolling mill and other associated equipment which should see commissioning of the entire plant commence by quarter end. Hiring of personnel to staff the facility is nearly complete with over 250 employees on site being trained. “We are confident that the quality of employee that we have been able to hire will enable the mill to perform well during the start up phase. The employees are anxious to start putting their training into practice,” Tulloch added.

This news release contains forward looking information with respect to IPSCO’s operations and beliefs. Actual results may differ from these forward looking statements due to numerous factors including estimated time of completion of projects, mechanical and equipment difficulties, ability to attract qualified workers, potential markets and demand for the materials produced, level of potential imports, market forces, domestic pricing of steel products, and trade laws. These and other factors are outlined in IPSCO’s regulatory filings with the Securities and Exchange Commission, including those on IPSCO’s Annual Report for 1999, its MD&A and Form 40-F.

For Further Information Please Contact:
IPSCO Inc.
John Tulloch
Senior Vice President and Chief Commercial Officer
Tel. 630-810-4767
Release 01-04

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