Published: May 5, 2021 |

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U.S. Steel is not moving forward with a planned investment at its Mon Valley Works and plans to permanently idle three batteries at its Clairton Coke Works as the company accelerates its efforts to reduce its carbon intensity, U.S. Steel CEO David Burritt said April 30.

“With a clear vision for our future we have evaluated how we allocate capital through the lens of sustainability, value creation and lower capital and carbon intensity across the footprint,” U.S. Steel CEO David Burritt said during the company’s first quarter conference call.

“When facts change, we must change; and as we step forward to meet the needs of a rapidly changing world, we must set aside the Mon Valley endless casting and rolling and cogeneration project,” Burritt added.

U.S. Steel first announced plans in May 2019 to invest more than $1 billion to upgrade its Mon Valley Works through the construction of a new endless casting/rolling facility at its Edgar Thomson Plant and a new cogeneration facility at its Clairton Coke Plant.

Since then, the company has shifted its focus from blast furnace production to its “Best of Both” strategy, buying a 49.9 percent stake in Arkansas-based electric arc furnace mini-mill Big River Steel in October 2019 and completing its purchase of the remaining equity in January 2021.

The events of the coronavirus pandemic — which hit blast furnace producers particularly hard due to the nature of their operations and ability to respond quickly to changing market dynamics — gave U.S. Steel the opportunity to reevaluate its capital allocation priorities, Burritt said.

The company also announced plans April 21 to achieve net-zero carbon emissions by 2050, stating this relies on growing its EAF fleet coupled with other technologies such as direct reduced iron, carbon-free energy sources, and carbon capture, sequestration and utilization.

The No. 1, No. 2 and No. 3 coke batteries at the Clairton Coke Works — the largest coke-making site in the U.S. — are to be idled by Q1 2023, Burritt said. The three batteries represent about 700,000 st, or 17 percent, of the site’s total 4.3 million st capacity, according to Kevin Lewis, vice president of investor relations for U.S. Steel.

The Mon Valley Works will continue to operate and serve its strategic end markets in appliances and construction, Burritt said, however an additional $1.3 billion that was earmarked for spending there will not be pursued. Of its U.S. flat-rolled blast furnace operations, Mon Valley is the lowest-cost operation in the company’s footprint and remains a competitive asset, Burritt said.

To date, U.S. Steel has spent about $170 million on the endless caster, with the equipment remaining in storage to give the company flexibility on its final location, Burritt said. The final location of the endless caster remains under study, he said.

The company’s strategy for capital allocation going forward will be focused on debt reduction, liquidity and investments in its operations, preferably through organic growth using the company’s existing footprint, he said. U.S. Steel ended Q1 with $2.91 billion in liquidity, including cash of $753 million, it said.

Looking at its idled blast furnaces, company executives said there are no plans currently to restart the A blast furnace at Granite City or the three blast furnaces at its Great Lakes operations.

Source: Platts

About United States Steel
United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: North American Flat-Rolled (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, strip mill plates, sheets and tin mill products, as well as all iron ore and coke. This segment serves customers in the service center, conversion, automotive, construction, container, and appliance and electrical markets. The USSE segment provides slabs, strip mill plate, sheet, tin mill products, and spiral welded pipes, as well as refractory ceramic materials. This segment serves customers in the construction, container, appliance and electrical, service center, conversion, oil, gas, and petrochemical markets. The Tubular segment offers seamless and electric resistance welded steel casing and tubing products, as well as standard and line pipe and mechanical tubing products primarily to customers in the oil, gas, and petrochemical markets. The company also provides railroad services and real estate operations. United States Steel Corporation was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.

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