U.S. Steel May Idle Plant, Citing Market Conditions
7 October 2015
U.S. Steel Corp. said Tuesday it is exploring consolidation of its North American flat-rolled operations and may temporarily idle steelmaking operations at an Illinois plant as it continues to struggle with demand.
Fluctuating oil prices, reduced rig counts, depressed steel prices and “unfairly” traded imports have led to the potential consolidation of operations, the steel producer said.
U.S. Steel said 2,000 employees at its Granite City Works plant in Illinois would be notified Tuesday of the possibility that the plant may be idled. In March, the company said it would consider idling the same plant, though it never had to cease operations.
In June, six steelmakers including U.S. Steel filed a trade complaint seeking tariffs for alleged unfair pricing of imported steel from China, India, Italy, South Korea and Taiwan. The petitioners are frustrated because prices have been sluggish despite strong demand. That has forced the companies to lay off thousands of workers and idle plants around the country.
They blame imports, particularly from China. Slowing demand in that country has led its steelmakers to export excess capacity, flooding global markets.
The company has made a series of retrenchments as it attempts to navigate the rough industry waters in the U.S. and pursues a longer-term strategy of repositioning itself as a smaller, more nimble company.
U.S. Steel said operations in Indiana, Michigan and Pennsylvania will continue.
Shares of the company declined 1.2% in after-hours trading Tuesday and, as of Tuesday’s close, have fallen 67% in the past year.