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Good morning. Summer is fading and so is the bloom on the U.S. stock market. Early fall is often a time of retrenchment for stock investors. They have plenty to mull over this month, from a continuing pandemic to inflation worries to political stalemates in Washington, D.C.
 
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Firms plan new domestic steel plants



Could bottlenecks in the supply chain spark construction of new steel plants in Pennsylvania?
  • It's a possibility raised over the last few days by two steel companies that say they intend to build new mills in the U.S.
  • One is Pittsburgh-based U.S. Steel. The company is proposing a $3 billion mini mill, though it has not specified any sites.
  • The other is Nucor. The North Carolina-based company said yesterday it is evaluating sites in Ohio, Pennsylvania and West Virginia for a new sheet mill estimated to cost about $2.7 billion.
  • "If our nation has learned anything over the last 18 months, we've realized that having a strong U.S. manufacturing supply chain is vital to our success as a nation," Nucor president and CEO Leon Topalian said yesterday in a conference call with stock analysts.
  • Steel was long one of the dominant industries in Pennsylvania but employs just a fraction of the workforce it once did.

Why is this happening: Steel is one of many products that has been in short supply as the U.S. economy bounces back from a sharp contraction during the early month of the Covid-19 pandemic last year.
  • Nucor is planning to serve two industries hit by limited supplies and high prices for steel, construction and car-making, according to a slideshow on its plans.
  • Both Nucor and U.S. Steel said their U.S. plants would also help them reduce carbon emissions.
  • U.S. Steel, for example, is hoping to reach net zero carbon emissions by 2050 and hopes to expand a sustainable product line called verdeX

When is this happening: Not soon.
  • Nucor said it expects to select and buy a site over the next year with a goal of beginning operations in 2024.
  • In a press release, U.S. Steel said it expects to begin construction in 2022 and production in 2024.
  • The long lead times suggest that the companies expect the need for domestically produced steel will continue.

The bottom line: Companies have been working to diversity their supply chains and overcome shortages, said Tom Palisin, executive director of The Manufacturers' Association, a regional trade group based in York County.
  • That could lead some production back to the U.S., he said. But the main goal is to get it out of China and other Asian countries.
  • "It could end up in Canada, Mexico or some other locations that are more reliable," he said.
  • The suppiy chain is not the only challenge for companies. Finding skilled workers is another. 
  • "A lot of our members are really busy and they are struggling to keep up," Palisin said.
 

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Quick takes



WHAT'S DISMISSED: The bankruptcy case filed by 120 York LLC, a partnership that owns the Think Loud building near PeoplesBank Park in York. On Friday, U.S. bankruptcy judge Henry Van Eck granted the partnership's motion to dismiss its bankruptcy case. The partnership includes members of the rock band Live: Patrick Dahlheimer, Chad Gracey and Chad Taylor. 
  • The partnership filed for bankruptcy in April. Its biggest debt is about $15 million owed to York-based Kinsley Construction for a loan tied to renovation of the Think Loud building, which is at 210 York St.
  • Kinsley had moved to put the building up for sheriff's sale. But the bankruptcy put that off.
  • Now, it appears that 120 York and Kinsley are working toward an agreement on the fate of the building, the largest asset held by 120 York.
  • “We are in the process of finalizing a settlement," the Kinsley organization said in a statement. "Our expectation is this matter will be settled by the end of October. At that time, we will provide additional information on next steps for the building.”
  • Kinsley reportedly has already taken ownership of the building, according to the York Daily Record newspaper.

The background: The 53,000 square-foot Think Loud building is a former printing plant that was converted into a mixed-use building.  


WHAT'S COMPLETE: The acquisition of GNB Financial Services by LinkBancorp. The two bank holding companies became one effective Sept. 18 in a deal valued at roughly $62 million. The combined institution, operating as LinkBancorp, has assets of $940 million and 10 branches in Chester, Cumberland, Dauphin, Lancaster, Northumberland and Schuylkill counties.
  • The chief banking subsidiary of the merged company will be The Gratz Bank
  • LinkBank, the original subsidiary of LinkBancorp, is now known as LinkBank, a division of The Gratz Bank. 
  • Why? The Gratz Bank, based in northern Dauphin County, operates under a banking charter that is more than 80 years old. The charter of LinkBank, which was founded in 2018, is three years old.
  • The post-merger bank is taking the older charter, said Andrew Samuel, CEO and co-founder of LinkBancorp. "It gives us a lot more flexibility."
  • Charters for new banks often limit activities like paying dividends.
 


WHAT'S CLOSING: A commercial printing plant in Lewisburg operated by RR Donnelly. The Chicago-based company plans to begin closing the plant in November, resulting in 70 layoffs, according to a notice filed with the state.
  • RR Donnelly has operated the plant  at 1601 Industrial Blvd. since buying it in 2004 from another company, according to The Daily Item newspaper
  • An HR exec referred questions to a spokesperson, who did not respond to requests for comment.
  • The Daily Item noted that the plant makes business forms, which are less in demand as more corporate functions go digital.

 
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Compiled and written by Joel Berg

 
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