wiredInUSA June 2020

Pittsburgh-based US Steel Corporation expects to lay off around 2,700 employees as a result of idling most of its blast furnaces which, even before coronavirus hit the economy, were already witnessing slowing demand. The figure represents around 10 percent of the payroll. “It’s all about minimizing or preserving cash in a difficult environment,” said Phil Gibbs, an analyst at KeyBanc Capital Markets. “They’re a heavy fixed-cost business, and volume right now is reasonably limited and they have to take actions.” By early May, US Steel had idled seven of its ten blast furnaces in the US — three at the Gary Works site in Indiana, one at Granite City in Illinois, two at Great Lakes in Michigan and another at Mon Valley Works in Pennsylvania — and was indefinitely idling Lone Star Tubular Operations and the Hughes Springs coupling production facility in Texas. In January, the steelmaker had said it anticipated “the first quarter of 2020 to be the trough for the year, due to the normal seasonality of our mining operations and lower first quarter shipments in flat-rolled [products].” That was before the pandemic disrupted the economy. Dan DeMare, a regional sales manager for Heidtman Steel, a service center customer of US Steel, commented that the capacity shutdown signals that the company is “willing to give up market share to preserve their business.”

Furnaces close in wake of manufacturing contraction

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wiredInUSA - June 2020