Bayou Steel closes Louisiana, Tennessee steel mills

Louisiana-based Bayou Steel has shut down its electric arc furnace (EAF) merchant bar quality (MBQ) mill in LaPlace, Louisiana, and will close a rolling mill in Tennessee.

Multiple government agencies confirmed the Louisiana closure, calling it unexpected.

The LaPlace EAF mill has a capacity of 540,000 t/yr (595,000 st/yr), according to data from the Association for Iron and Steel Technology. The mill produces steel flats, wide flange beams, channels and angles.

Bayou Steel filed a Workforce Adjustment and Retraining Notice (WARN) in Tennessee, saying it would be laying off employees at its 215,000 t/yr rolling mill in Harriman. The Tennessee mill makes steel flats, rounds, squares and angles, and began operations in 1994. Bayou Steel bought the mill in 2016.

The company also operates three depots in Chicago, Catoosa, Oklahoma, and Leetsdale, Pennsylvania. The status of those facilities is unknown.

Black Diamond Capital Management, the private equity firm that owns Bayou Steel, declined to comment on the closures when reached by phone today.

The closures come amid a slump in the US and global steel markets.

US steel prices have fallen since August, with the Argus weekly domestic US HRC index declining by 10pc to $542/st today. Oversupply has weighed on the market, with Bayou Steel appearing to be the first EAF-based mill that has shut down since Section 232 steel tariffs of 25pc were imposed in March 2018 in an effort to support the US industry.

US Steel idled two of its US furnaces in July due to weak market conditions, and recently said it expects the furnaces to remain offline for the rest of the year.