United States Steel Corp. X 3.59% said it would restart a blast furnace in Illinois to handle the higher demand it expects from President Donald Trump’s proposed tariffs on foreign steel.
The steelmaker said it also plans to call 500 employees back to work at the Granite City mill. U.S. Steel idled its blast furnaces there two years ago as a flood of cheap imports pushed down domestic steel prices. Steel producers have been hurt in recent years by increasing competition from foreign competitors, particularly China, that have ramped up production at lower prices.
Prices have been rising again in the U.S. in part because of the Trump administration’s discussions over whether to widen tariffs that have been applied piecemeal in recent years. Spot-market sheet-steel prices have risen more about 37% since October to about $810 a ton, according steel-industry price surveys.
Prices are expected to rise further if the tariffs proposed last week by Mr,. Trump—25% on steel and 10% on aluminum—are implemented.
U.S. Steel restarted steel processing at the Granite City site and was expected to restart blast-furnace operations to make raw steel from iron ore after
“Our Granite City Works facility and employees, as well as the surrounding community, have suffered too long from the unending waves of unfairly traded steel products that have flooded U.S. markets,” said Chief Executive David Burritt.
U.S. Steel said firing up the Granite City blast furnace would take about four months. The added production will add about 1.4 million tons of steel to the U.S. market annually, analysts said, and generate up to $85 million in pretax income this year for U.S. Steel.
While the furnace has been idled, it has been kept warm to avoid destroying its heat-resistant brick lining, which is able to withstand temperatures of about 5,000 degrees needed to melt ore into molten iron. The company will have to replenish inventories of iron ore, metallurgical coking coal and other ingredients that are piled inside the furnace when it operates. Granite City Works also has another idle blast furnace with a capacity of 1.4 million tons that could be restarted later.
The company’s shares rose 4.9% in trading Wednesday morning to $46.69, making for a 29% rise in the past 12 months.
Century Aluminum Co. and Nucor Corp. also welcomed the tariffs last week after a meeting at the White House with Mr. Trump.
Not all metal makers are happy. California Steel Industries Inc. said the tariffs would hurt its business importing steel slabs to make into pipes and sheet metal.
And manufacturers including Caterpillar Inc. and Harley-Davidson Inc. have said the tariffs could significantly increase their raw-material costs. Construction equipment Terex Corp. this week said it would pass on higher steel costs to customers.
“The steel market has moved as though the tariffs are going into place,” CEO John Garrison said on Tuesday. “We can’t be the shock absorber for that significant increase.”
—Andrew Tangel contributed to this article.
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