AK Steel has idled its Dearborn Works’ hot strip mill, but will keep the blast furnace operational, according to reports.
Taking the mill, which is located near Detroit and has an annual capacity of 3.3mn mt, offline is the latest sign that the economic fallout from the COVID-19 pandemic will persist for some time. Manufacturing has decelerated 50-80pc, prompting mills to scale back production and lay off their employees.
Steel mills are operating at around 56pc capability utilization in the US, significantly below the industry target, and last year’s average, of 80pc. Declining hot rolled coil (HRC) prices haven’t hit the floor yet—prices are projected to bottom near the end of May—hovering around $450-470/nt, which is 25pc below its January price of $600/nt.
According to reports, AK Steel will produce and ship slabs to fulfil existing orders at its Middletown Works plant near Dayton, Ohio, a 4.9mn mt hot-strip mill.
This decision follows Cleveland-Cliffs’ announcement of closing its Northshore Mining operations in Babbitt and Silver Bay, along with Hibbing Taconite, a joint venture involving ArcelorMittal and US Steel. The company recently suspended mining operations at the Minnesota iron range for two months beginning May 3. The closure of the three mines has affected more than 1,500 employees.
According to a spokesperson for Cleveland-Cliffs, the company is in a quiet period, but no further details about the Dearborn Works idling were provided. The company is slated to provide a financial update on May 11.