Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

EVRAZ is laying off close to 200 workers at its Rocky Mountain steel mill in Colorado as a result of poor demand from the oil and gas industry. 


While the layoffs, slated for mid-May, were categorized as temporary because of a right of return clause negotiated by the workers’ union, the operations’ pipe segment will only restart once oil prices and pipe demand return, the timelines for which is unknown.


All salaried employees at EVRAZ are required to take a monthly week-long furlough for the foreseeable future, according to Patrick Waldron, a US spokesperson for EVRAZ. The furlough enables employees to apply for state unemployment benefits, although, it is unknown how the state will support it. Monthly applications may be required. 


The wire rod and coiled reinforcing bar mill in Pueblo, Colorado will remain operational. The company hasn’t provided capacity utilization information, but production has been realigned with current demand. The longs market, and by extension mill runs, hasn’t been affected like the flat rolled mills that serve the automotive and industrial industries. The mill was upgraded in late 2015.


EVRAZ has been planning a $500mn solar-powered long rail mill expansion to the site for some time. The strategy would play well to its strengths as one of the world’s largest railway product manufacturers. In October 2018, Pueblo Economic Development Corporation offered EVRAZ an incentive package with $100mn in tax breaks as long as EVRAZ invested $200mn directly, $480mn in total, and maintained 1,000 full time employees. EVRAZ performed engineering and site work towards the project in 2019. By late last year, EVRAZ employed around 800 workers in Pueblo, suggesting the rail mill would have created an additional 200 jobs. The project was previously noted for its 630,000mt annual rail capacity and maximum length of 100mts, for which construction would have begun early this year with a 2022 completion date. Capital expenditure projects are being reevaluated. 


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