U.S. Steel has announced plans to resume production of steel slabs at its Granite City Works plant in Illinois, marking a significant shift in operations after a two-year shutdown. The facility, which had its last blast furnace idled in 2023, will restart steel-making operations in response to increasing customer demand. This decision comes after initial plans to wind down operations at the plant were reversed under pressure from the White House.
In a statement, David Burritt, CEO of U.S. Steel, emphasized the importance of customer demand in the company’s decision to restart the blast furnace. “After several months of carefully analyzing customer demand, we made the decision to restart a blast furnace,” he stated. Burritt expressed confidence in the company’s ability to operate safely and profitably to meet projected demand in 2026.
Job Creation and Production Timeline
The company anticipates resuming steel production in the first half of next year, contingent on hiring and training new workers, as well as ensuring all equipment is in safe working order. U.S. Steel indicated that it needs to fill 400 of the 500 positions necessary to operate the plant effectively.
Currently, there are only 12 operating blast furnaces in the United States, according to the American Iron and Steel Institute, a stark decline from approximately 140 in the 1970s. The decline in domestic production was largely attributed to increased foreign competition. Notably, no new blast furnaces have been opened in the U.S. for decades, underscoring the significance of U.S. Steel’s decision in context of the overall industry landscape.
Economic conditions in the steel sector have seen improvements over the past few years. Analysts point to a robust U.S. steel market bolstered by tariffs enacted under former Presidents Donald Trump and Joe Biden. Additionally, the revival of the automotive and construction sectors is contributing to the uptick in demand for steel products.
In October, domestic steel mills shipped 7.7 million net tons of steel, marking a 9% increase compared to the same month in 2022. Year-to-date shipments through October also showed a 5% rise over the previous year, reflecting a recovery in the industry.
Strategic Acquisition and Future Investments
U.S. Steel’s decision to restart operations is particularly noteworthy as it follows the recent acquisition agreement with Japan-based Nippon Steel, which agreed to purchase the American company for $14.9 billion. To address national security concerns related to the acquisition, Nippon Steel committed to allowing federal oversight of certain operational decisions, including plant closures and idling.
Furthermore, Nippon Steel pledged to invest approximately $14 billion to enhance steel production capabilities in the United States, which includes plans to construct a new electric furnace. Under the terms of the national security agreement, protections for Granite City Works will last until 2027, while other U.S. Steel facilities will be protected until 2035.
Granite City Works plays a vital role in producing rolls of sheet steel used across various industries, including construction, container manufacturing, and automotive production. The planned resumption of operations at this facility not only signifies a revitalization for U.S. Steel but also represents a broader positive trend for the American steel industry as it navigates the challenges of global competition.
