Steel is being made again at Granite City Works
Steel production started Tuesday at Granite City Works mill for the first time in about seven months.
The target date for sending molten iron to an oxygen furnace — and thus making steel — was set for today. But by Tuesday afternoon, that process already started, said Dan Simmons, president of United Steelworkers Local 1899. His local union represents most of the mill’s hourly workers.
This marks yet another part of restarting United States Steel Corp.’s local operations, a process that began less than a month ago. Union officials were notified in mid-June that some parts of the idled facility would reopen. Since then, Simmons estimated, 800 or so workers have been recalled to prepare the facility.
"This is key to the restart of the facility and an indication that (U.S. Steel is) definitely committed to further restart," Michelle Applebaum, a Chicago-based managing partner with consulting firm Steel Market Intelligence, said in an e-mail Tuesday.
U.S. Steel spokeswoman Erin DiPietro declined to comment, saying the company did not provide updates on operations.
Granite City Works makes steel used in construction, automobiles and other industries. When the recession and tough credit conditions hurt those industries, demand for steel plummeted.
U.S. Steel and other steel companies idled plants, laid off workers and slashed production. At Granite City Works, U.S. Steel halted its steelmaking operations in December and laid off about 1,600 workers.
An additional 390 union and nonunion workers were laid off in February when U.S. Steel temporarily stopped production of coke direct payday loans. Coke is a key steelmaking ingredient that it had been stockpiling.
In recent months, a crew of fewer than 100 workers had worked at the plant.
But a boost in orders has led U.S. Steel to recall some of its Granite City work force and restart certain areas of the facility, such as a blast furnace, according to union officials.
The blast furnace is an important part of the steelmaking process. Coke, iron ore and lime are fed into a blast furnace to extract iron, the basic ingredient for steel.
The molten iron is shipped to the steelmaking area. Chemicals and other elements are added to the molten iron, and then oxygen is injected. Molten steel is formed.
That molten steel then is cast, hardens into slabs and ultimately is used to make finished steel products.
A gradual improvement in U.S. steel demand is coming from manufacturers’ need to replenish inventory, not necessarily an economic rebound, analysts say.
Various mills "are starting to reopen because (manufacturers’) inventories are at the lowest possible levels," said John Anton, a Washington-based steel analyst for market research firm IHS Global Insight. "Even without much economic recovery, we still have to make more steel than (in) the past nine months."
Anton said that a positive but weak economic pick-up was expected this quarter, but that "things won’t really pick up until the second half of 2010."