U.S. Steel Plans Inactivate Mill Michigan: United States Steel Corp X -10.78% said it would leave most of a factory near Detroit inactive as company losses increase in a weak domestic steel market.

The cessation of Great Lakes Works' steelmaking operations will help the company reduce costs to help pay for modernization or replacement of equipment at its flagship factories. Despite Trump administration tariffs on foreign metal that were intended to power domestic producers by squeezing cheap imports, earnings at US Steel and its competitors have lately been affected by falling prices and demand from American manufacturers.

U.S.A. Steel has pledged to spend at least $ 2 billion on new equipment at factories in Gary, Ind. And near Pittsburgh. The company is also raising hundreds of millions of dollars in debt to take over a factory in Arkansas and spending $ 280 million on a new furnace at its pipe factory in Fairfield, Alabama.

US Steel Plans Inactivate Mill Michigan

Steel production at Great Lakes Works will cease on April 1, and the steel sheet mill will close later in the year, the company said. Over 1,500 employees were fired at the factory.

"The current market conditions and long-term prospects for Great Lakes Works made it imperative that we take action now," said Chief Executive David Burritt. "These decisions are never easy."

US Steel shares recently dropped 8.7% to $ 12.19 per share.

The company on Thursday night forecasted a higher than expected fourth quarter loss of $ 1.15 per share, before special charges, compared to an adjusted gain of $ 1.82 per share in the fourth quarter of the previous year. . U.S.A. Steel narrowly lost 21 cents a share during the third quarter. The company said it would suspend purchases of its own shares and cut the quarterly dividend to one cent per share for 5 cents to save cash.

Steel Dynamics Inc. and Nucor Corp have forecast lower earnings in the fourth quarter due to falling prices and weakening demand. Nucor, the nation's largest steel producer, said last week that it expects fourth-quarter earnings per share of 25 cents to 30 cents, after earning $ 2.07 per share during the quarter last year, and 90 cents during the third quarter. General Motors Co's strike this fall, less oil and natural gas drilling, and a fall in agricultural and construction machinery production have weighed on steel demand during the quarter.

Sheet metal prices have rebounded in recent weeks as steel users increase their purchases to replenish stocks. But steel market analysts expect prices to weaken again by the beginning of next year, as manufacturing output remains modest.

The future of EE's Great Lakes Works UU And his factory in Granite City, Illinois, near St. Louis has become increasingly precarious since October, when Burritt said production of flat-rolled steel, the company's main product, would be concentrated in factories. near Pittsburgh, in Gary, and Big River Steel, which US Steel expects to complete in 2022.

US Steel left one of the Great Lakes' high furnaces idle to cast iron ore during the summer, leaving a furnace operational. Over the past five years, the factory has averaged 2.4 million tonnes of crude steel production annually. To offset production losses, the company plans to move more jobs to Gary's factory. Great Lakes stores that apply coatings to finished steel and other processes will remain open, the company said.

Several of US Steel's competitors are investing in production capacity that will add several million tons of additional steel to the US market in the next three years. This is likely to keep prices low and make it increasingly difficult for US Steel's oldest, higher-cost factories to operate profitably.

"We see the closure of US flat-rolled steel fabrication capacity as positive for the domestic industry, given the many planned expansion by its peers," said Martin Englert, steel industry analyst. for brokerage firm Jefferies LLC, in a note to investors.