Difficulties returned to the US steel industry, despite tariffs imposed last year on imported steel that were meant to help.
US Steel has announced that it will stop two blast furnaces where it produces steel, one at its flagship plant in Gary, Indiana, near Chicago, the other in Ekors, Michigan, near Detroit. According to company representatives, production at idle stoves is reduced by about 200,000 tons of steel or more per month.
“We will resume the production of blast furnace at one or both blast furnaces when the market situation improves,” the company said.
US Steel has also cut revenue forecasts and closed an additional blast furnace in Europe. Although a slight decrease in profits is associated with a slowdown in the European economy, this also indicates a decline in demand in the US market. US production has been slowing down lately.
The actions of US Steel follow similar warnings on Monday from Nucor, the largest steel producer in the country, and Steel Dynamics. Both are currently forecasting lower profits. Nucor pointed to lower demand from the US auto industry. Steel Dynamics said that steel prices fell across the entire product line.
The Trump administration set a 25 percent tariff on steel imports in 2018. This helped temporarily raise prices, as domestic producers began to no longer worry about such great competition from cheap steel from China and other places.
Buyers began to worry about how badly the tariffs would hurt their offer, so in early 2018 they went for a recess, which also led to an increase in prices. As steel prices and profits in the industry increased, domestic factories restored capacity at previously non-operating factories.
