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Steel production now down 2.7% for the year amid coronavirus crisis
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Steel production now down 2.7% for the year amid coronavirus crisis

Steel production now down 2.7% for the year amid coronavirus crisis

A bar of steel makes its way through the 80" hot strip mill on its way to becoming a coil of steel.

With auto plants shut down during the coronavirus crisis, Great Lakes steel production plummeted by 59,000 tons last week, a 9.7% drop, the second straight week of steel decline.

Steel mills in the Great Lakes region, clustered mainly in Northwest Indiana, made 549,000 tons of metal, down from 608,000 tons the previous week, according to the Washington, D.C.-based American Iron and Steel Institute. 

Overall, domestic steel mills in the United States made 1.53 million tons of steel last week, down 8.1% from 1.67 million tons the previous week. Automakers like Ford, General Motors and Honda, some of the largest consumers of North American steel, have temporarily ceased production to limit the spread of COVID-19 though Northwest Indiana's steel mills  – whose blast furnaces normally burn around the clock – have stayed open.

So far this year, domestic steel mills in the United States have made 25 million tons of steel, a 2.7% decrease compared to the 25.77 million tons made during the same period in 2019. 

U.S. steel mills have run at a capacity utilization rate of 79.4% through April 4, down from 81.5% at the same point in 2019, according to the American Iron and Steel Institute.

Steel capacity utilization nationwide was 68.5% last week, which was down from 71.6% the previous week and down from 81.3% at the same time a year ago. 

A steel capacity utilization rate of 83.4% last year was the highest level reached in the U.S. since September 2008, according to the trade publication Platts.

Steel production in the Southern region, a wide geographic swath that encompasses many mini-mills and rivals the Great Lakes region in output, produced just 602,000 tons of steel in the week that ended Saturday, which plummeted down from 645,000 tons the week before. Production in the rest of the Midwest plunged to 139,000 tons last week, down from 155,000 tons the week prior.

ArcelorMittal idling blast furnace

ArcelorMittal is idling another blast furnace as automotive plants remain closed during the coronavirus public health crisis, causing a steep drop in demand for steel.

The steelmaker idled the Indiana Harbor #3 blast furnace in East Chicago last fall and announced it would idle the Indiana Harbor #4 blast furnace in last month. Now the Luxembourg-based steelmaker, the largest in the world by volume, will blow down the Cleveland #6 blast furnace, leaving it with just four blast furnaces running in the United States.

"The COVID-19 outbreak has impacted ArcelorMittal USA’s key use markets. In response to this, we are adapting our capacity to meet changing demand while maintaining the flexibility of our operations," ArcelorMittal spokesman Bill Steers said. "As a result, ArcelorMittal Cleveland has begun preparations for a safe and orderly blow down of CLE #6 blast furnace with necessary precaution to preserve the asset for future production."

Major automakers, who account for nearly half the business at large vertically integrated steel mills ArcelorMittal operates in Northwest Indiana and Cleveland, have shuttered their factories to limit the spread of coronavirus.

The steelmaker hopes to minimize layoffs at the ArcelorMittal steel mill on the banks of the Cuyahoga River.

"ArcelorMittal USA plans to work with the USW to minimize impact on our workforce for the duration of the outage by finding available opportunities for displaced workers in other areas of our operations," Steers said. "ArcelorMittal will continue to engage with our customers in understanding the new market realities resulting from the COVID-19 outbreak, which may require additional capacity optimization to align our production with end use demand. Our employees are our greatest asset and their health and safety is our top priority. During this time we continue to be committed to protecting the well-being of our employees, contractors, vendors and customers to ensure the continuity and sustainability of our business and communities."

Gallery: The world of Steel

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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.

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