ArcelorMittal USA will idle one of its blast furnaces in Cleveland “very soon,” according to an internal memo, because of diminished demand induced by the COVID-19 crisis.
The company is idling blast furnace No. 6, which is estimated to be running at 80pc capacity, while blast furnace No. 5 will remain online. ArcelorMittal, the world’s largest steel producer, said virus containment efforts in the industry have adversely impacted its steel products.
The company’s North American operations produced about 21.9mn mt of crude steel last year, of which the Cleveland plant comprised approximately 3.2mn nt (2.9mn mt), or about 8,800nt per day. An estimated 4,400nt of daily steel capacity will be lost when the blast furnace is idled.
According to a market participant, the company’s decision to idle the furnace is driven by sectors, including automotive, that have been forced into extended closures or have proportioned their volumes to sagging demand. This is the latest step the company has taken to counterbalance its steel output with the waning needs of its customers.
On March 20, ArcelorMittal decided to idle blast furnace No. 4 at its Indiana Harbor plant. The company has also reduced spending across all steel mills and mines by about $125mn.
US hot rolled coil (HRC) prices have been fallen throughout March, dropping by 4.4pc last week compared to the week prior.
In the US, HRC prices averaged $723/nt ($797/mt) for the first half of 2019, then decreased to $603/nt during the second half of the year. By Q4 2019, prices averaged $579/nt. The current domestic HRC price is around $500-$550/nt, but projections target $450-480/nt by the end of Q2 2020 as mills equalize or reduce inventory.
However, according to market participants, ArcelorMittal Weirton’s tin plate operation, located in West Virginia, has seen increased demand and sales because consumers are purchasing more canned goods amid stay-at-home orders. The company has not yet indicated results of the surge.