Evraz Oregon Steel, the Russian steelmaker’s facility in the US is laying off 230 employees on weak demand due to COVID-19 and a slump in oil prices.
The company recently processed labor documents to Oregon’s employment agency in preparation for these layoffs. The slump in oil prices have also led to a drastic drop in pipeline tubing as active projects have been delayed, frozen, or slowed down.
As a result, Evraz has decided to shut down its spiral mill, which turns steel coils made at the plant’s rolling mill into pipes used for oil and gas projects. The company has indicated its Portland rolling mill will remain operational.
Market participants have told Davis Index that Evraz halted its April ferrous scrap purchases within the Canadian and Oregon regions as it realigns operations to present demand conditions.
The current round of layoffs, which the company indicated would be done over the next two months, in Oregon would cut Evraz’s 600-strong workforce by 38pc. Operations at the facility will be idled systematically to allow the reoperation once the market regains momentum.
Answering Davis Index’s inquiry about planned layoffs at any of its other facilities, a spokesperson for Evraz North America said Portland was its only focus at present and any additional operational changes would depend on further business assessments.
Evraz’s Portland plate product line will also operate with fewer employees due to decreased global demand caused by COVID-19. The steelmaker’s Oregon mill is the only plate mill in western US and is adjacent Canadian provinces.
Lead times on plate, an indicator of demand at the mill level, have been shortening since the middle of March as stay-at-home orders and the resulting slower demand for steel products get affected. Operationally, the site has sourcing options also, given its proximity to deep water ports and rail in Oregon, to source domestic or foreign steel slabs cost-effectively.
Evraz paid $2.35 billion in 2007 to buy Oregon Steel, which was founded in Portland in 1928. Four years later the company moved the headquarters for Evraz North America from Portland to Chicago. Evraz North America has facilities in Colorado, Oregon, and five in western Canada.