New OSHA Hexavalent Chromium Standard Impact on Steel Processors and Fabricators MSCI Specialty Materials Division Council Meeting March 16, 2006

What Happened? OSHA has issued a final ruling for the Permissible Exposure Limit (PEL) to hexavalent chromium to 5 micrograms per cubic meter and Action level of 2.5. Current PEL = 52. A tenfold reduction in the limit! Absolute limit = 5.0. Above this is a violation of the ruling. Action limit = 2.5. Above this is not a violation, but companies must take corrective actions

Implementation timeline The rule was published on February 28, Effective Date is May 30, All provisions of the rule, except engineering controls, must be implemented by November 27, Engineering controls will go in effect May 31, 2010 – allowing industry and stakeholders time to construct and install engineering controls. The rule will be appealed, but a “stay” is required to prevent the clock from ticking We need to win the appeal.

What is hexavalent chromium? Stainless steel does not contain hexavalent chromium (Cr +6) Heat generating operations can generate airborne hex Cr such as: –Welding of stainless steel or chromium coated material –Weld overlay with stainless steel –Cutting or torch burning of stainless steel or coated material –Plasma cutting of stainless steel –Forging –Chrome plating –Heat treatment Dust generating operations such as –Abrasive blasting of stainless steels or steel painted with Cr6+ containing material –Grinding and polishing

Stainless Steel Industry Position Workplace safety and good stewardship of our environment are of the highest priority to our industry The preponderance of the scientific evidence suggests that stainless steel is a safe product to produce, fabricate and use in a wide variety of applications important to an advanced economy/society Overzealous parties have misrepresented limited data unrelated to the stainless steel sector in pushing for an overly restrictive exposure limit that will cause undo harm to our industry.

Stainless Steel Industry Position OSHA has overestimated the risk and dramatically underestimated the universe of potentially affected facilities and employees and thus dramatically underestimated the total costs of compliance –MISSING FACILITIES: Fabricators of many kinds, field erectors, tube welders, pipe welders, forgers, heat treatment facilities, refractories, auto repair shops, mining, fiberglass. –Engineering control costs are severely understated –All industry estimate $2.9 billion vs. OSHA $223 million

How this will impact you and your customers This rule applies to you You will have to perform employee exposure testing You may have to perform: –engineering assessments –medical surveillance –define areas of exposure, post alerts, and limit access to these areas –provide respiratory protection –provide protective clothing at no cost to employees –provide change rooms, use special laundry services shower facilities and separate eating and drinking facilities –Additional recordkeeping requirements

Immediate Steps Conduct exposure monitoring at your key facilities and encourage downstream customers to test employees. If exposures range in proximity of 2.5 ug/ m3, applicability of rule is triggered. Report findings to SSINA or your industry association Support litigation efforts to prohibit OSHA from lowering PEL further and in efforts to raise the PEL for stainless steel operations. Legal challenges to OSHA rule must be filed by April 29. Your company and trade association should consider challenging rule individually or joining steel industry litigation efforts (decision required by April 17)

What action can we take? NAM and SSINA appealed on March 10 –Public Citizen appealed also; want more stringent limits than OSHA established. Tell your customers – it impacts many of them. Decide if you want to join us. –Contact David Hartquist, Counsel to SSINA at (202) or, –Info at

Backup slides

In practice four different levels Below 0.5 µg/m 3 under any condition – Exempt Between 0.51 and 2.5 µg/m 3 –Housekeeping – no dust –Clean eating and drinking areas Above AL 2.5 µg/m 3 for more than 30 days per year –All of the above –Install engineering controls within four years –Personal respiratory protection –Monitoring every 6 months –Medical Surveillance, at least annually –Record keeping, Hazard communication training Above the PEL 5.0 µg/m 3 –All of the above –Alternative - Establish regulated areas - roped off, limited access, free protective clothing, washing on paid time, work side/street side washing facility, no eating or smoking –Monitoring every 3 months

Possible actions you can consider to avoid triggering the regulation (and remaining below AL 2.5 µg/m 3) Some examples are: Map all stainless operations –Use the latest, most accurate measuring methods and approved laboratories. OSHA ID-215 will be used for enforcement Begin engineering control feasibility studies and cost calculations, they are time consuming –More exhaust ventilation, maybe separate buildings –Environmental permit effects Change of welding practices indoors and outdoors, training, new welding techniques, new fillers

This new ruling impacts you and your customers Violation results in an OSHA Recordable Incident. Very high compliance costs. Producers, Service Centers, Fabricators and Users of chromium containing metals that use heat generating processes likely will be required to test employees, provide medical surveillance, respirator protection, and install engineering controls to comply with the new limit. Respirators to reduce exposure below 5ug/m3 required by November 2006 if necessary. Stainless industry economic analysis indicates very high compliance costs. –Engineering control costs expected to exceed $160 million

Stainless Steel ‘The Material of Choice’ Stainless steel remains very safe to use, a superb choice in applications requiring corrosion/heat resistance, hygienic properties, durability and aesthetic qualities The industry and important stakeholders are doing all possible to ensure it remains the premier material in current/future applications and remains a very competitive material compared to less noble alternatives One of the most recycled products in the world – stainless steel has tremendous ‘green’ credentials and is critical to clean air, fresh water, containment and treatment of hazardous wastes and a product of tremendous value to industry and consumers alike