US Steel announced on Tuesday that it is examining a possible consolidation of its North American flat rolled operations and may idle steelmaking operations and most finishing operations at Granite City.
US Steel said it routinely adjusts production to align with market fluctuations. The potential consolidation is a result of challenging global market conditions, including fluctuating oil prices, reduced rig counts, depressed steel prices and unfairly traded imports.
WARN notices will be issued to 2,000 workers at Granite City Works beginning on Oct 6. and are separate from previously issued notices. This is the second time that workers have faced a possible closure at Granite City this year. In March 2015, workers were issued WARN notices but in May US Steel canceled plans for the closure.
The majority of steel produced at Granite City Works supplies Lone Star Tubular which makes pipe for the oil industry. Hundreds of workers were laid off from Lone Star earlier this year due to weak demand resulting from falling oil prices.
US Steel has a number of items on its plate right now: US Steel recently idled its steelmaking operations and downstream operations at Fairfield Works, US Steel Canada is in bankruptcy proceedings, and the company is negotiating a new labor contract with the USW.
If plans are followed through on Granite City, the mill’s two blast furnaces and finishing operations that include a hot strip mill, pickle line, 4-strand cold reduction mill and hot-dip galvanizing lines would be idled. Granite City Works has an annual steelmaking capacity of 2.8 million tons.
US Steel said operations in Indiana, Michigan and Pennsylvania will not be affected.
Following the announcement, SunCoke Energy, which supplies coke to Granite City, issued the following statement:
“SunCoke supplies coke to U.S. Steel’s Granite City Works under a long-term, take-or-pay contract until 2025. Any potential temporary idling of their facility does not change U.S. Steel’s obligations. We expect U.S. Steel will continue to honor our contract. We value our long-standing relationship with U.S. Steel and would assist in shipping coke to other U.S. Steel facilities.”
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