Subscribe for 33¢ / day
ArcelorMittal Indiana Harbor

A bar of steel goes through the 80-inch hot strip mill on its way to becoming a coil of steel.

Northwest Indiana is home to towering blast furnaces that stand more than 300 feet tall and blaze around 4,000 degrees, forging the pig iron that makes cars and dishwashers everywhere. 

As mighty as the blast furnaces are, fewer burn today than once did around the lakeshore. Many have been idled over the years, and junked for scrap.

Imports have continued to take a major toll on the Region's steelmaking facilities. In recent years, ArcelorMittal Indiana Harbor in East Chicago has idled the No. 1 aluminizing line, the 84-inch Hot Strip Mill, the No. 5 Continuous Galvanize Line, Steel Shop No. 2, The No. 2 Galvanizing Line, and Indiana Harbor Long Carbon.

Many of the cutbacks came after China's long-booming economy finally slowed down, and it starting unloading excess steel around the globe, ArcelorMittal Indiana Harbor General Manager Wendell Carter said.

"Since I've been in the business the import market has always been 10 million to 12 million tons per year in the United States," Carter said. "Now it's around 15 million tons. It grew appreciably during the period of time that China cooled in 2014 and 2015, and started destocking its steel."

The U.S. government has tried to protect domestic mills by approving more than 100 tariffs of as much as 500 percent on cold-rolled steel from China, Carter said.

But foreign-made steel continues to make its way to American shores. After China got slapped with tariffs, imports from neighboring Vietnam skyrocketed from about 68,000 tons a year to 836,000 tons a year, Carter said.

"If they want to trade fairly, we're happy to do that," he said. "But we don't want them to circumvent our rules."

ArcelorMittal closed several lines in East Chicago because they were underused and because it's more profitable to operate fewer lines so they run more productively. ArcelorMittal's No. 7 blast furnace, the largest in North America, runs at more than 90 percent capacity while the other two at the steel mill in Indiana Harbor run at "a little less." Carter said.

When cheap imports flood in, domestic steelmaking capacity gets underutilized, he said.

"To me, it doesn't make sense to have an operational industry working at 75 percent capacity," he said.

Nearly a quarter of steel imports come from Canada because of the North American Free Trade Agreement, while South Korea accounts for about 17 percent, largely because of the plants Korean automakers Hyundai and Kia operate in the United States. 

"Imports are affecting all segments," he said. 

ArcelorMittal Executive Vice President Brian Aranha said the global oversupply was commoditizing steel, but that the steelmaker could compete by modernizing production processes to be competitive on cost and offering unique products, such as the advanced high strength steel that have been revolutionizing the automotive industry.

"(ArcelorMittal R&D East Chicago) is important for the innovations that result in cost reductions, as well as for new product development applications," he said. "Our commitment to R&D is very high, close to a quarter of a billion dollars every year, so our company can stay competitive and our sales force can be out there selling."

0
0
0
1
5

Business reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.