Steel Mills

Goncalves: Despite higher tariffs, two Cliffs mills to remain idled

Written by Michael Cowden


Cleveland-Cliffs Chairman, President, and CEO Lourenco Goncalves said he would keep one mill idled and still plans to idle another despite increased protections from Section 232 tariffs doubling to 50%.

The Cleveland-based steelmaker’s rail mill in Steelton, Pa., will be idled on June 30, as previously announced. And the company will not restart tinplate production at its mill in Weirton, W.Va., Goncalves said.

Cliffs idled the Weirton facility in 2024. And it more recently scratched plans to build transformers at the plant.

Import competition led to the closures, Goncalves said.

The Cliffs’ CEO also said that he had officially scrapped plans to use hydrogen as a reductant at its mill in Middletown, Ohio. He had previously said that the scope of the hydrogen project – paid for in part by a $500-million government grant – would be “substantially altered.”

Goncalves provided the update on Cliffs’ operations during a wide-ranging press conference on Tuesday at the American Iron and Steel Institute (AISI) annual meeting in Washington, D.C.

Weirton, tinplate ain’t coming back

Production of tin mill products ceased at Weirton after the International Trade Commission (ITC) decided that imports did not pose a threat to domestic production.

Cliffs and the United Steelworkers (USW) union initiated the tin mill products trade case in January 2023. The Commerce Department, a year later, assessed final anti-dumping and countervailing duty margins. They included CVD rates of approximately 330-650% for Chinese producers.

Goncalves characterized the ITC’s injury determination as “shocking.”

“When they said there will be no harm to the industry if we do not implement these tariffs, I shut down Weirton.” Now customers who are facing 50% tariffs on tinplate “are crying wolf,” he said.

It was an apparent reference to the Can Manufacturers Institute. The group criticized Section 232 tariffs increasing to 50%. It also said there was not enough domestic production to meet US demand.

“The answer is, ‘No.’ I’m not going to bring tinplate production (back) again. When the horse leaves the barn, the horse does not go back to the barn – these things have consequences,” Goncalves said.

Tin mill products such as tinplate are used extensively in canned food.

Steelton, nor is rail

The Steelton rail mill will be idled at the end of June because imports account for up to half of US market share. “The 25% didn’t do anything to change that. Let’s see if the 50% will,” Goncalves said.

The mill continues to run through June 30 because the Worker Adjustment and Retraining Notification (WARN) Act requires employers to give workers 60 days’ notice before a plant closing or mass layoff. Cliffs announced the layoffs on May 2.

Steelton might not face closure if the 25% tariff had sent the intended message – that domestic rail companies should buy from domestic mills. “But at this point, the horse has left the barn,” Goncalves said.

The US continues to make rail at Steel Dynamics Inc.’s mill in Columbia City, Ind., and at Evraz North America’s mill in Pueblo, Colo.

Middletown says goodbye to H2

Goncalves also said the company had scrapped a “breakthrough” plan to use hydrogen as a reductant at its integrated mill in Middletown, Ohio.

“It was based on one thing that we’re not going to have, and that’s hydrogen. Without the hydrogen, the entire thing falls apart,” he said.

Recall that the Energy Department under the Biden administration awarded Cliffs grants of up to $575 million to upgrade its operations. The department intended for the bulk of that amount, $500 million, to be used to replace the blast furnace at Middletown with a hydrogen-based direct-reduced iron (DRI) plant and two electric melting furnaces (EMFs).

Goncalves said he decided to cancel the project because a hydrogen hub intended to serve Middletown “is not going to be built on time.”

But Cliffs will continue to invest in and upgrade the Middletown mill, which makes exposed automotive parts – one of the more demanding steel applications. “I have no assurances at this point. But I hope that I will have support from the US government to continue to do that,” he said.

“Plan B” is to add AI technology to the Middletown furnace, which Goncalves said the company has already done at the blast furnace at its steel mill in East Chicago, Ind. “It will be the most modern blast furnace, at least on this side of the world,” he said.

Goncalves said in the company’s first-quarter earnings call that the Middletown furnace would be relined. Relining is an expensive process. But it can extend the life of a furnace for decades.

Butler, still powering up

He reiterated, however, that Cliffs would continue with a project to make grain-oriented electrical steels (GOES) at its mill in Butler, Pa. GOES are important for power transmission.

That project will be paid for with $75 million in government money and with $150 million from Cliffs, Goncalves said.

“We need transformers in this country badly to continue to improve the electrical grid. That is not one, is not something that will be discontinued,” he said.

Michael Cowden

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