U.S. Steel officials say the company’s pellet operations on the Iron Range will not be affected at this time by the idling of two blast furnaces‚ one in Gary, Ind., the other at Great Lakes in Detroit.
U.S. Steel owns and operates the Minntac plant in Mountain Iron and Keetac in Keewatin. The company also has 14.7 percent ownership at Hibbing Taconite.
Minntac produces about 16 million tons of ore pellets annually, while Keetac has a capacity of 6 million tons.
Minntac and Keetac, which experienced widespread layoffs in 2015 for more than a year, are both currently operating at full production.
The company released a statement regarding the Iron Range operations on Wednesday. It said, “Based on current market conditions, there are currently no plans to adjust our Minnesota iron ore mining operations.”
U.S. Steel announced on Tuesday, that the Gary Works blast furnace in Indiana will be temporarily idled because of falling steel prices, orders and revenue. There is no timeline for a restart. Gary Works blast furnaces produce steel for cars, appliances and other products.The company said in a memo “that there would be no immediate impact on employment levels at the mill, but that the company is “mindful of the impact these announcements have on employees and their families.”
The company also plans to leave a blast furnace near Detroit offline after the completion of a planned maintenance outage that started last week.
The temporary idlings will reduce the blast furnace production of pig iron by 200,000 to 250,000 tons a month starting in July.
“If both furnaces remain idled for the remainder of the year, we expect full year flat-rolled shipments to third-party customers to be approximately 11 million tons,” the company said. “We will resume blast furnace production at one or both idled blast furnaces when market conditions improve.”
In addition, U.S. Steel plans to idle a blast furnace in Europe with a production capacity of 125,000 tons a month. It will cut production by 3.6 million tons if it remains idled for the year.
District 3 state Sen. Tom Bakk of Cook, said idling of the Gary Works blast furnace creates “a lot of uncertainty on the Range with the shrinking demand for cars and appliances. No blast furnace, no pellets.”
The DFL senator said he hopes it’s “not a precursor of a recession.”
But Bakk said a likely interest rate cut by the Fed next month is another sign of economic instability.
“We’re in the 10th year of an economic expansion. We’ve seen these cycles before. And the Range is always on the front end of a downturn,” he said.
Business North Contributor Bill Hanna, who has been a writer and editor in the newspaper business for more than 40 years, was a Reporter and Executive Editor at the Mesabi Daily News on the Iron Range from 1985 to 2016. He has won more than 50 state and national awards. He currently writes Sunday columns for the MDN Op/Ed section.