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US defines ‘essential,’ draws calls from steel

Mar 20, 2020 | 03:34 PM | New York | Grace Lavigne Asenov

The United States' federal government has released guidelines on which industries are considered “essential” while responding to the Covid-19 pandemic, drawing calls from domestic steel associations to recognize the steel manufacturing sector as critical.

The Cybersecurity and Infrastructure Security Agency, which operates under the Department of Homeland Security oversight, released guidance this week to help state and local jurisdictions and the private sector identify and manage “essential” workforces, meaning those that are considered vital to national security, economic security and public health and safety. The guidance named 16 essential sectors, including:
  • Critical manufacturing: Core industries primary metals manufacturing; machinery manufacturing; electrical equipment, appliance and component manufacturing; and transportation equipment manufacturing.
  • Defense industrial base: This sector consists of government and private-sector organizations that can support military operations directly; perform research and development; design, manufacture and integrate systems; and maintain depots and service military weapon systems, subsystems, components, subcomponents or parts - all of which are intended to satisfy US military national defense requirements.
  • Energy: This sector includes electricity, oil and natural gas, and notes a heavy reliance on pipelines to distribute products.
Domestic steel associations have called on President Donald Trump's administration to recognize the steel manufacturing sector as an “essential” industry.

“As the Secretary of Commerce determined in 2018, steel is important to national security, well beyond obvious defense applications to encompass critical infrastructure and transportation, electric power and energy generation systems, as well as water systems,” American Iron and Steel Institute (AISI) president and chief executive officer Thomas Gibson said in a letter to Vice President Mike Pence on Friday March 20.

“Without access to a reliable source of steel production during this crisis, our national and economic security will be severely impacted,” he said.

The Steel Manufacturers Association (SMA) urged the same, highlighting steel's role in supporting critical infrastructure.
“The role domestic steel production plays in the support of critical infrastructure needed for the delivery of public health services cannot be understated,” SMA president Philip Bell said in a letter to Pence on Friday. “Therefore, we are calling on the administration to exempt steel companies and their employees from any workforce reduction, shelter-in-place or other orders that may be imposed by local, state or federal officials in response to Covid-19.” 

Specialty steel maker Allegheny Technologies Inc (ATI) noted on March 20 that it continues to operate across the US, including in Pennsylvania and California.

“Based on our industries, we are part of the critical supply chain that is exempt from the states’ order,” the company said via email. “We want you, our valued customer, to know that we have taken precautionary measures to protect our employees and partners and mitigate the spread of Covid-19 while we continue to operate.” 

The Institute of Scrap Recycling Industries (ISRI) has also called on the government to designate recycling operations as essential facilities that can keep operating through Covid-19-mandated shutdowns. 

Alloy processor ELG Metals temporarily shut down its plant in Mobile, Alabama, on March 20 due to concerns about the virus, noting that it was still trying to get clarity on its status as an essential business.

Domestic hot-rolled coil prices remained in a holding pattern this past week while the market waited for the shock of automotive plant shutdowns in North America to spread across the steel supply chain.

Fastmarkets' daily steel hot-rolled coil index, fob mill US was as calculated at $28.40 per hundredweight ($568 per short ton) on March 19, down by 2.4% from $29.09 per cwt one week earlier.