Steel Mills

NLMK USA, USW 'Far Apart' Despite Record Steel Prices
Written by Michael Cowden
February 4, 2021
NLMK USA and striking United Steelworkers at the mill’s operations in western Pennsylvania remain at loggerheads nearly five and a half months after the labor action began.
“As of now, we remain far apart with the union. We continue to meet in good faith working towards a resolution,” NLMK USA President and CEO Robert D. Miller said in an email.
The primary obstacles remain issues related to healthcare, he added.
Workers at Local 1016-3, which represents more than 400 employees at NLMK USA’s Pennsylvania operations, have been on strike since Aug. 22.
Local 1016 President Todd Clary agreed the primary hurdle was healthcare. And the union has already gone “more than halfway” to try to make a deal with the company on the issue, he said.
“It’s not like the union is being greedy. All we are asking is to maintain the current healthcare package. We are willing to pay a little more for it. And some modest raises,” Clary said.
A prior contract, negotiated in 2016, allowed the union to keep its healthcare plan but stipulated that union members would not receive raises in part so that NLMK USA could invest in a walking beam furnace at its Farrell, Pa., plant, he said.
Farrell rolls slabs into hot-rolled coil. It also makes pickled-and-oiled product and cold-rolled coil–much of which is used to feed NLMK USA’s nearby Sharon Coatings galvanizing facility.
NLMK USA has said the walking beam investment was shelved in part because of the imposition of Section 232 tariffs.
Clary blamed the protracted impasse on intransigent management.
“With the price of steel at an all-time high and the slab availability, they should be willing to make an agreement,” he said. “The company could be making a lot of money and so could the employees.”
“The bottom line is this, we were definitely hopeful that we could get a contract and get our people back to work,” Clary said. “We want to work, to make steel, and to get into the market again.”
NLMK USA has continued production with salaried staff as well as replacement workers, but is not able to run as many shifts as it could with hourly workers.
Some market participants had predicted that high steel prices might encourage the company and the union to come to an agreement. They had also hoped that an accord might help ease a spot market supply squeeze that has hit the Midwest and Great Lakes regions particularly hard.
Steel Market Update’s average hot-rolled coil price stands at $1,150 per ton ($57.50/cwt), a new all-time high and up 161.4% from a 2020 low of $440 per ton in August before the strike began.
NLMK USA operates an electric-arc furnace (EAF) mill in Portage, Ind., in addition to its slab-rerolling and downstream sheet processing operations in Pennsylvania.
The company’s fourth-quarter results were dinged by the combined impact of the strike and a shortage of duty-free slabs.
Slab was difficult to secure in the fourth quarter because the Trump administration reduced Brazil’s Section 232 quota allotment. But the quota reset at the beginning of 2021. Re-rollers, such as NLMK Pennsylvania, have in recent years relied heavily on Brazilian slab because it is exempt from the 25% Section 232 tariff on semi-finished goods from most other nations.
NLMK previously had relied primarily on slab from its parent company in Russia. But that arrangement became less economical with the imposition of Section 232 tariffs in 2018.
By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden
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