US Steel to keep 2 blast furnaces idled
Integrated steelmaker US Steel will keep its two remaining idled blast furnaces down for the rest of 2020.
The Pittsburgh-based steelmaker said the two blast furnaces — the 1.5mn short ton (st)/yr No 4 at Gary Works, Indiana and the 1.4mn st/yr blast furnace A at Granite City, Illinois — will remain offline to balance supply with demand. Both were among five blast furnaces idled by US Steel after the Covid-19 pandemic began weighing on the US economy in mid-March and as state and local governments implemented stay-at-home orders and businesses were shut in an attempt to control the spread of the disease.
Integrated steelmakers took nearly 18mn st/yr of pig iron production off line from March to May as the US economy contracted into a recession because of coronavirus-related manufacturing closures, including complete closures across the North American auto industry of nearly two months.
US Steel's chief financial officer Christine Breves said one of the two idled blast furnaces remains banked, meaning it can be brought on line quickly if customer demand increases, though she did not specify which blast furnace she was referring to.
The continued idlings will mean the 6mn st/yr Keetac iron ore pellet mine in Minnesota will remain indefinitely idled as well.
The announcement comes as US Steel has brought back on line three blast furnaces — two at Gary Works and one at its Mon Valley Works south of Pittsburgh — over the last three months. The blast furnaces represent 3.06mn st/yr of pig iron production.
US Steel continues to focus on purchasing the remaining 50.1pc share of upstart electric arc furnace (EAF) steelmaker Big River Steel in Arkansas. That mill is scheduled to complete its expansion to 3.3mn st/yr of flat-rolled production by the end of 2020, ahead of schedule.
US Steel will start up its first EAF at its tubular operation in Fairfield, Alabama, in the fourth quarter. The 1.6mn st/yr EAF will feed the Fairfield operations, which is the only operating site in the tubular business. US Steel has indefinitely idled the remainder of its tubular operations, including facilities in Ohio and Texas, as US oil industry demand remains weak. Prices for West Texas Intermediate (WTI), the US benchmark, are down by 36pc since the beginning of the year at $41/bl but are up significantly from lows in April, when oil futures plunged into the negative for the first time in history.
Shipments for US Steel's tubular division fell by 32pc year-over-year to 132,000 short tons (st).
Multiple modernization projects that had been in the works are paused, including a new endless casting and rolling facility at Mon Valley and upgrades at the hot strip mill at Gary Works. Investment in a new Dynamo line at US Steel's mill in Slovakia also is on hold.
Demand from automotive original equipment manufacturers (OEM) has improved and sustained higher levels in July, according to the steelmaker. The company believes auto makers are aiming for higher production rates than in 2019 as they rush to refill car dealerships after nearly two months of downtime between mid-March and mid-May.
Increased demand from the appliance sector drove the restart of Mon Valley's 1.5mn short ton (st)/yr No 1 blast furnace.
Steel production in the second quarter fell by 51pc year-over-year to 1.47mn st, while shipments fell by 36pc to 1.79mn st. Utilization rates at US Steel's flat-rolled mills were at 35pc in the second quarter, down by half compared to the same period of 2019.
The company's mill in Slovakia produced 645,000st in the second quarter, down by 44pc year-over-year, and utilization rates were at 52pc, down by 40pc points.
Total shipments in the second quarter were down by 1.47mn st or 37pc year-over-year to 2.53mn st.
US Steel posted a loss of $589mn in the second quarter compared with a profit of $68mn in the same period of 2019.
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