Domestic Demand on Steel Weakens

United States Steel Corp. said it will cut production by idling two blast furnaces in response to falling demand for steel from a weakening manufacturing sector.

The company will take one furnace off line at its flagship mill in Gary, Ind., and another at its mill in Ecorse, Mich. The latter was idled recently for maintenance work and won’t be returned to service when work is complete.

U.S. Steel, as well as rivals Nucor Corp. and Steel Dynamics Inc., have issued downbeat guidance for second-quarter profit, citing weaker-than-expected demand for steel. Production of cars and farm equipment have slipped recently, and U.S. manufacturing output fell in three of the first five months of this year.

“Market conditions have softened,” U.S. Steel said last week. “We will resume blast furnace production at one or both idled furnaces when market conditions improve.”

The benchmark price of hot-rolled coiled sheet steel in the U.S. has dropped by more than 35 percent since approaching a decade high last summer. Hot-rolled steel last week was at $533 a ton, according to S&P Global Platts’s price assessment.

Source: Reuters