CHICAGO Responding to market conditions, ArcelorMittal Indiana Harbor has placed about 155 hourly employees on a 32-hour workweek.
The Eact Chicago, Ind., mill, which is part of Chicago-based ArcelorMittal USA, produces special bar quality (SBQ) products in 1000, 1100 and 1200 grades.
"The company anticipates returning to normal operations once market demand can sustain full operations," a spokeswoman told AMM Tuesday. The company did not respond to requests for comment about how the action will impact production levels.
Each of the affected employees has less than three years service with ArcelorMittal.
During earnings calls in recent weeks, other publicly held SBQ manufacturers have discussed the slowdown in demand and reduction in capacity utilization, which had been rising for 18 months on the strength of orders from automotive and heavy equipment manufacturers.
At Canton, Ohio-based Timken Co., reduced demand for commodities translated into lower demand for mining and oil and gas drilling equipment, which hurt steel business revenue, president and chief executive officer Jim Griffith said late last month (amm.com, Oct. 25). The U.S. supply chain contains excess bar inventory, including imports, according to Timken.
Executives at Fort Wayne, Ind.-based Steel Dynamics Inc. agree. "Yellow goods (heavy equipment) have taken a quick inventory assessment and are constricting their consumption at this moment," said Richard P. Teets, president and chief operating officer for steel. He also cited falling drill rig counts as a harbinger of lower steel shipments.
"There certainly has been some slowing in some of the markets (for) SBQ," John Ferriola, president and chief operating officer of Charlotte, N.C.-based Nucor Corp., told investors recently. "Heavy trucks are off ... from the peak (of) a few months ago. In other areas, (there is) still significant strength. Automotive would be one example."
ArcelorMittals Long Carbon business in North America shipped 1.03 million tons of steel, including SBQ, in the third quarter, down 14.7 percent from the second quarter and 13.4 percent below a year earlier.