US steel producers move to cut production

US steel producers move to cut production

In a two-pronged move designed to perform routine maintenance and reduce lingering inventories, Mittal Steel is idling several of its blast furnaces. Mittal announced plans this week to idle its H-3 furnace at its East Chicago, Indiana Harbor plant. The company’s No. 6 furnace at Indiana Harbor has been idle since March. Meanwhile, Mittal took its Cleveland plant’s C-6 furnace, which normally produces approximately 1500 tons daily, offline on May 5 so that it could begin gunning of refractory material to shore up the furnace’s lining. This routine maintenance is normally performed in June. Mittal is currently whittling down excess inventories it built up during the last half of 2004. It will return the furnaces to service as business conditions warrant. In a move similar to Mittal’s, US Steel is planning to close its Illinois, Granite City Works plant for one week beginning July 3. The company indicates that the “vacation shutdown” is designed to control inventory. Of the company’s 2200 workers, 700 will be affected by the shutdown; workers are contractually obligated to take vacation during that time. The shutdowns are seen as positive moves in the steel industry. They will allow inventories to return to more “normal” levels by July and August, which should bring about price increases by the fourth quarter.