SMU Community Chat
USS Restarts Gary Works No. 8 Blast Furnace
Written by Michael Cowden
March 16, 2023
US Steel has restarted the No. 8 blast furnace at its Gary Works in northwest Indiana.
The Pittsburgh-based steelmaker said it restarted the furnace in early March in response to improving demand and rising prices.
The company had idled the No. 8 furnace in September, citing difficult market conditions and competition from imports.
It hinted that the furnace might restart on its first quarter earnings call in early February, when a company executive said the No. 8 was idled “for now”.
The move marks the second major blast furnace restart US Steel has undertaken this year. The company also restarted the No. 3 blast furnace at its Mon Valley Works near Pittsburgh in late January.
We have updated our blast furnace status table to reflect both changes.
US Steel broke the news about the No. 8 furnace in earnings guidance released after the close of markets on Thursday, March 16.
The company projects adjusted earnings before interest, taxes, depreciation, and amortization (ebitda) of $375 million in the first quarter, a figure it said was better than expected.
“Momentum continues to build in the North American flat-rolled market,” US Steel president and CEO David Burritt said in a statement.
“We expect these trends to continue into the second quarter given extending lead times and the flow-through of higher selling prices,” he added.
US Steel operates both integrated and electric-arc (EAF) sheet mills. Its mini-mill segment, effectively Big River Steel in Osceola, Ark., expects to return to positive ebitda in Q1 as it continues to chew through high-cost metallics purchased in the panic following Russia’s invasion of Ukraine.
Other EAF sheet mills have faced similar issues. Recall that Ukraine and Russia accounted for approximately two-thirds of US pig iron supplies before the war. And steelmakers, afraid of running out of the raw material, temporarily bid prices sharply higher.
US Steel said Big River was also benefiting from a new pig iron caster at Gary Works, which is helping to lower raw material costs at the EAF mill.
Also at Big River, US Steel said it would this summer commission a new non-grain-oriented (NGO) electrical steel line.
US Steel in addition sees better times for its mill in Slovakia. The facility is projected to lose less money than the company feared it might as recently as February because a mild winter in Europe reduced energy costs.
European prices are also improving thanks to better demand and fewer imports, US Steel noted.
By Michael Cowden, michael@steelmarketupdate.com
Michael Cowden
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