U.S. Steel is temporarily shutting down three of its blast furnaces in response to a slowdown in demand, the company disclosed in its second-quarter guidance this week.
Officials said a blast furnace already down for scheduled maintenance at its Great Lakes Works in suburban Detroit is expected to remain idled after that work is complete. The Gary Works facility in Indiana will also idle one of its furnaces.
Those moves, the company said, are expected to reduce its monthly production capacity by 200,000 to 225,000 tons beginning next month as it seeks “to better align our global production with our order book.” The furnaces would resume operations “when market conditions improve.”
A third furnace will also be idled at U.S. Steel’s facility in Slovakia, which officials said is dealing with rising import levels, high raw material costs and sluggish demand.
Although the company’s guidance projected that its flat-rolled segment would see higher adjusted earnings compared to the previous quarter, officials said declining steel prices and softening demand are hurting that sector despite tariffs largely designed to bolster domestic steel and aluminum producers.
KeyBanc Capital Markets steel analyst Phil Gibbs told The Washington Post that prices slid amid lower demand from the automotive, energy and agricultural industries.
“While market conditions have softened, we remain focused on executing the value creation strategy that is underway,” the company said in the statement. “We believe that the investments being made to improve costs and expand product capabilities will create a more differentiated and agile company.”
