Action is a result of weak tubular market conditions, company says. The outlook appears brighter for its flat-roll division.

United States Steel Corp. (U.S. Steel), headquartered in Pittsburgh, has decided to idle operations at its tubular plants in Lorian, Ohio, and Lone Star, Texas.

A statement from the company to Recycling Today reads: "This week, U.S. Steel advised employees that Lone Star Tubular Operations in Lone Star, Texas, and Lorain Tubular Operations in Lorain, Ohio, will indefinitely idle operations due to challenging market conditions and high import levels. The company has issued Worker Adjustment and Retraining Notification (WARN) notices related to the indefinite idling at each facility. The WARN notices advise that layoffs related to the adjusted operations could take effect in as little as 60 days.

"The adjustment of operations has the potential to impact approximately 600 employees at Lone Star Tubular Operations. At Lorain Tubular Operations, the potential impact is around 250 employees. While we do not expect to lay off that number of employees, the total number of employees impacted will depend on operational and maintenance needs." 

The company issued a WARN Act notice  to the state of Ohio March 23, alerting that it would indefinitely idle the U.S. Steel Seamless Tubular Operations LLC in Lorain, with employment losses expected to begin May 24.

The Lorain mill manufactures 380,000 tons of seamless pipe used in oil and gas exploration and construction, the U.S. Steel website notes.

Lone Star Tubular’s mill No. 1 produces electric-resistance welded (ERW) pipe ranging from 7 inches to 16 inches in outside diameter (OD) with an annual production capacity of 400,000 net tons, while its mill No. 2 produces pipe ranging from 1.088 inches to 7.15 inches in OD with a capacity of 390,000 net tons per year, the company’s website says.

In first-quarter 2020 earnings guidance the company issued March 20, U.S. Steel President and Chief Executive Officer David B. Burritt says, “The tubular market continues to be challenging, and conditions in Europe remain volatile. We are focused on preserving cash and liquidity in the current market environment.”

The outlook appears to be better for the company’s flat-roll operations. “Through the quarter, our flat-rolled operations have performed well, and we are recognizing the operational and financial benefits of the investments in our assets that we have made over the past several years,” Burritt says. “Strong performance on reliability, quality and productivity, combined with a continued focus on driving sustainable cost improvements across the footprint, have contributed to a better than expected first quarter to date.”

He adds, “We continue to monitor the impacts of the coronavirus and are following policies and procedures recommended by health and government officials to ensure our employees are working in a safe and healthy environment. We understand the situation remains fluid, and we are preparing our operations to be flexible as circumstances may warrant. Our regional supply chain minimizes the risk of significant supply-chain related production disruptions, and we continue to work with our customers to provide value-added steel solutions as we execute our world-competitive, ‘best of both’ strategy.”

U.S. Steel indicates that its adjusted earnings before interest, taxes, depreciated and amortization (EBITDA) for the first quarter of 2020 are expected to be approximately $30 million, with first-quarter 2020 adjusted diluted loss per share to be approximately 80 cents.

The company says its flat-rolled segment results are expected to be better than anticipated, pointing to strong operating performance, continued cost improvement and seasonally strong shipment volumes that more than offset the typical seasonality of mining. Additionally, the domestic flat-rolled steel market has remained healthy throughout the first quarter to date. U.S. Steel says extended lead times are supported by “robust construction end-market demand and an end to destocking that negatively impacted order rates throughout 2019.”

In April, U.S. Steel says it will begin the indefinite idling of its iron and steelmaking operations at Great Lakes Works outside of Detroit. This decision was previously announced in December 2019 as part of its “best of both” strategy. U.S. Steel says it expects to indefinitely idle the Great Lakes Works hot strip mill before the end of 2020. Separately, the company adds that it expects to begin a scheduled 48-day outage at its Gary (Indiana) Works blast furnace No. 4 in April.

The company's "best of both" strategy refers to its partnership with Big River Steel in Arkansas that gives U.S. Steel "the best of both integrated and mini mill technology and talent."   

In Europe, the company says steel selling prices have steadily increased throughout the quarter, resulting in better than anticipated first-quarter performance for its European segment to date. Still, the flow-through of lower prices on its monthly and quarterly contracts and elevated raw material costs are limiting near-term financial performance, U.S. Steel adds.

Regarding the global coronavirus outbreak, U.S. Steel says it “is an unprecedented and rapidly evolving situation. It remains uncertain how long the situation will last and what the impacts will be for the full year. Given the significant uncertainty in the marketplace, we continue to monitor demand levels and plan to provide more information during our first-quarter earnings call.”

U.S.-based associations call on government to ensure operating status for aluminum sector.

The Arlington, Virginia-based Aluminum Association and the Wauconda, Illinois-based Aluminum Extruders Council (AEC) have both called upon the federal government and state and local governments to “ensure that aluminum industry operations and employees are designated as ‘essential’ and exempt from any ‘shelter in place’ orders during the COVID-19 pandemic.”

The Aluminum Association put its appeal in the form of a two-page released March 19 titled “American Aluminum Jobs: Essential to the Nation.”

That document states that aluminum has already been identified as a critical mineral that is “vital” to American security, per earlier Trump Administration trade-related executive orders.

The association also writes in that memo, “The aluminum industry produces a number of products that are essential during a public health crisis including inputs for medical supplies, building materials, transportation equipment, and food and beverage packaging.”

The AEC in a March 20 news release states, “Now is the time for the Trump Administration to put the aluminum industry to work during this health crisis and deploy the resources that were deemed vital to our national security by the President.” Adds the AEC, “Aluminum extrusions are crucial components in a variety of products and systems that are used every day, and which are essential to keeping our nation running in an emergency such as medical equipment, temporary building structures, rail cars, trucking and other critical industries.”

Comments AEC President Jeff Henderson, “The aluminum extrusion industry stands ready to assist in this time of emergency that our country faces. The members of the AEC are hard-working, resilient and compassionate. They want to be part of the solution and not be relegated to the sidelines in this most critical time in our country.”

The temporary change allows weaker batteries to be sold/shipped into the domestic market.

The Basel Action Network (BAN ), Seattle, the founder of the e-Stewards Standard for Ethical and Responsible Reuse, Recycling and Disposition of Electronic Equipment and Information Technology , has decided to create a temporary four-month deviation to the standard that will allow information technology asset disposition (ITAD) service providers and recyclers to sell and ship weaker batteries into the domestic market.

The change is in response to the increase in telecommuting related to the COVID-19 outbreak.

Jim Puckett, executive director of BAN, sent an email notice March 24 alerting e-Stewards recyclers to the change. He explains: “One thing we have learned is that while equipment pick-ups are generally halted, there is at the same time a rapidly growing demand for work-at-home second-hand equipment. e-Stewards refurbishers can play a major role in filling this increasing need. In this regard, we realize that our standard's normal restraints designed to prevent the offshoring of weak batteries may be preventing progress. e-Stewards have reported that they cannot replace the equipment with new batteries fast enough to meet the surging demand.” 

The e-Stewards Standard temporarily will allow for the domestic sale of weaker batteries if the following criteria are met:

The deviation is posted here.  

Puckett writes, “We believe this is an important example of the kind of responsiveness needed at this time to help the community at large and the community of e-Stewards at the same time.”

Shanghai, London and U.S. markets react to global COVID-19 lockdowns.

Copper lost more value on global trading exchanges Monday, March 23, with the red metal’s price hitting a level in Shanghai that has not been seen since 2009.

Copper lots traded on the Shanghai Futures Exchange (SHFE) fell 8 percent in value by mid-day Monday, according to a Reuters news item. The price rebounded slightly in the afternoon, finishing at $5,252.57 per metric ton ($2.38 per pound).

That trading range is the lowest for copper in Shanghai since June of 2009, according to Mai Nguyen of Reuters. Decreased economic activity because of the COVID-19 pandemic have many traders bearish on the red metal's demand.

Copper pricing has fared no better on the London Metal Exchange, finishing March 23 at $4,617.50 per metric ton ($2.09 per pound), exhibiting a month-long price trend with far more downs than ups.

Listings for March copper futures on the Comex exchange in the United States posted to the CME Group website showed copper trading at a range from $2.12 to $2.15 per pound as of Tuesday morning.

EuRIC calls on governments to allow collection of recyclables and suggests keeping material in Europe.

Brussels-based EuRIC (European Recycling Industries’ Confederation) has called on the European Union and applicable authorities from member states of the EU, plus Norway, Switzerland, and the United Kingdom, to acknowledge “the essential role of the waste management and recycling industry in collecting, sorting and recycling of [discarded materials] from household and industries to protect human health and the environment.”

The association says recyclers possess “strategic importance for the European economy as a provider of secondary raw materials , which are critical to downstream industries, some of them directly involved in combatting the COVID-19 pandemic.”

EuRIC also has asked governments and corporations to allocate resources so those in the waste management and recycling sectors (including haulers) “are provided with sufficient personal protective equipment (PPE), in line with national and European safety measures as well as to benefit from any schemes (such as child care) to adequately carry out their activities.”

The association includes in its letter a request for waste and recycling to be classified as a strategic sector and to “formally acknowledged” as such by EU member states.

EuRIC also suggests the EU and member states consider taking moves to “protect cross-border movement” of secondary raw materials, giving priority to “feed European production facilities (smelters, steel and paper mills, plastic converters, etc.).”

The association says it will keep monitoring the impact of COVID-19 on the waste management and recycling industry in Europe.