Coronavirus forces US Steel to idle blast furnaces

: Coking coal, Metals
20/03/27

Integrated steelmaker US Steel is idling two blast furnaces and cutting its capital spending for 2020 because of impacts of the coronavirus pandemic.

The company is idling the 1.5mn short ton (st)/yr No 4 blast furnace at its Gary Works flat-rolled mill in Indiana. The blast furnace was expected to undergo a planned 48-day maintenance outage in April, but will now be idled until market conditions improve.

US Steel will also immediately idle the more than 1mn st/yr blast furnace A at its Granite City Works flat-rolled mill in Illinois, just north of St Louis, Missouri. The mill's larger blast furnace B will keep operating.

The moves come as US Steel continues to prepare to idle the remainder of its Great Lake Works mill in Michigan. The remaining online blast furnace, with a production capacity of 1.4mn st/yr, is set to begin shutting down next week.

In total, the sheet mill idlings total nearly 4mn st/yr of capacity.

Other steelmakers like ArcelorMittal and Gerdau announced closures of their own due to coronavirus impacts, particularly on the automotive sector.

US Steel is also increasing its borrowing under its revolving credit facility by $800mn in order to improve its cash on hand.

The company is delaying multiple investments, including the construction of an endless casting and rolling line and cogeneration facility at its Mon Valley Works mill in Pennsylvania. Upgrades to the Gary Works' hot strip mill will also be paused, and investment in a new non-grain oriented electrical steel line at US Steel's mill in Europe is also delayed. The paused investments are expected to cut spending by $125mn.

Construction of US Steel's electric arc furnace (EAF) at its Fairfield Works tubular operations in Alabama is continuing and expected to be completed this year, with the EAF — the first for US Steel — turning on in the second half of 2020.

The company said the actions came due to the one-two punch of impacts of the spreading coronavirus and a severe decline in oil prices in the US.

US automakers have announced sweeping shutdowns during the coming weeks, and oil prices have more than halved in the last month. US Steel announced earlier this week that it was idling its oil and gas tubular operations at its Lorain, Ohio, and Lone Star, Texas, pipe mills.

By Rye Druzin

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