US Steel proposes permanent closure of blast furnace

United States Steel (X – Get Report) stock is falling by 0.83% to $19.11 on Monday afternoon, following the company’s announcement that it will close operations at its Fairfield Works plant in Fairfield, Ala.

Today about 2,000 people work at the US Steel operations in Fairfield, about 1,300 of which work at Fairfield Works.

In a statement from U.S. Steel, CEO Mario Longhi says the shutdown is needed to improve the efficiency and cost structure of the company’s rolled-steel segment.

The blast furnace, along with operations associated with it, will close November. 17 affecting 1,100 employees, according to the Birmingham Business Journal. In addition to the blast furnace, on Monday U.S. Steel said it would permanently close the hot strip mill, the pickle line, cold mill, annealing facility, and the stretch and temper line.

The slab and rounds casters, the #5 coating line and the Double G hot-dip galvanizing joint venture in Jackson, Mississippi would continue to operate.

Shutting down the facilities would not impact the Fairfield Tubular Operations or the electric arc furnace construction project, officials said.

The move comes as U.S. Steel and other domestic producers face intense competition from steel imports as well as slumping demand and prices.

The proposal came after market analysis of the company’s current and long-term global operational footprint competitiveness.