Gerdau Special Steel is idling its melting and rolling operations at its special bar quality (SBQ) in Jackson, Michigan in April. However, its finishing facilities will remain operational.
Around 35pc of the 400 employees at the mill will be laid off on April 15 because of this decision. According to Lindsey Erb, Manager, Communication and Public Affairs at Gerdau, the company decided to lay off workers due to factors that affect the long-term stability of the business.
Melting capacity at the 330,000mt per year EAF is being diverted to two separate mills, one in Monroe, Michigan and the other in Fort Smith, Arkansas. The combined production capacity at the other two sites is approximately 1.15mn annually. A portion of the capacity transferred south will be felt by scrap sellers to Gerdau in the Michigan region, who are already exasperated by the idling of the US Steel Great Lakes Works in April.
SBQ pricing for hot rolled in mid-January is about $700/nt ($771/mt) fob mill and $1,100/nt ($1,212/mt) fob mill for cold rolled. Prices ticked up in January by about 3pc compared to November as scrap prices gained for three months in a row. In November 2019, prices were about $680/nt ($749/mt) for hot rolled SBQ and $1,070/nt ($1,179/mt) for cold rolled SBQ, down 18-20pc compared to prices at around $850/nt and $1,310/nt ($/mt) for the respective grades in November 2018, all prices in fob mill terms.