U.S. Steel Cuts Jobs, Idles Furnaces as Demand and Prices for Steel Tumble

Researched by Industrial Info Resources (Sugar Land, Texas)--Declining orders and a plunge in steel prices are setting off alarms at United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania), which has announced two rounds of layoffs and the idling of several steel furnaces in the past few weeks. Industrial Info is tracking more than $3 billion in active projects from U.S. Steel, more than $1.3 billion of which is attributed to projects under construction.

Click on the image at right for a graph detailing U.S. Steel's active projects by U.S. state.

Weakening demand from the automotive, farm-machinery and food-packaging sectors have been reversing fortunes for domestic steelmakers, who had enjoyed strong steel prices and demand in the months following the Trump administration's steel tariffs. But with the global economic outlook gradually dimming, steel prices have tumbled, and steel- and aluminum-consuming companies are playing it safe with their investments.

In a Worker Adjustment and Retraining Notification filed earlier this month, U.S. Steel announced it would lay off hundreds of workers at its Great Lakes Steel Works facility in Michigan in the coming weeks for as long as six months or more; the company had announced earlier in the summer that it would idle a furnace at the facility. Industrial Info is tracking $25 million in repairs and relining on Blast Furnace B at Great Lakes Steel Works, which the company believes will reduce emissions and improve operations at the 3.8 million-ton-per-year mill. For more information, see Industrial Info's project report.

Industrial Info also is tracking an estimated $750 million modernization program at Gary Steel Works in Gary, Indiana, which is expected to modernize equipment and machinery at the company's 7.5 million-ton-per-year flagship mill. U.S. Steel also is considering a rebuilding and relining of basic oxygen furnaces, which would last about two months. For more information, see Industrial Info's project reports on the modernization and oxygen furnaces.

U.S. Steel idled a furnace at Gary Steel Works in June, but company officials insist that they are not eyeing any changes in employment at the plant, which has more than 3,800 employees. This was disputed by an official at the United Steelworkers union, who said that layoffs were on the horizon at Gary Steel Works.

Either way, the Hoosier State is set to lose jobs from U.S. Steel, which is one of Northwest Indiana's largest employers. The company announced late last week that it would idle its tin-manufacturing facility in East Chicago, Indiana, and lay off about 150 workers. The East Chicago plant makes tin used in end products such as soup cans and paint cans. U.S. Steel plans to offer about half of the mill's 297 employees jobs at other U.S. Steel facilities in the area, including Gary Steel Works, according to Reuters.

Executives from U.S. Steel and other metal-manufacturing heavyweights have cheered tariffs from the Trump administration as bolstering their bottom lines. But companies that consume metals--such as those that use tin cans--have seen their costs worsen. Those companies include Del Monte Foods (San Francisco, California), which announced days before U.S. Steel's statement on the Michigan facility that it would close two of its tin-canning plants in Illinois and Minnesota, laying off about 800 workers.

In an earnings call earlier this summer, a Del Monte official attributed the company's challenges to "headwinds, including rising metal packaging prices and impact of tariffs imposed by the U.S. government."

In addition to the above-mentioned capital projects, Industrial Info is tracking about 30 maintenance-related projects at U.S. Steel facilities across the U.S., with scheduled kickoff dates out to mid-2021. Click here for a list.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.