Author: Paul Ploumis15 May 2015 Last updated at 02:52:37 GMT
COLUMBIA (Scrap Monster): Arcelor Mittal Long Carbon North America has decided to close its Georgetown, South Carolina wire rod mill by third quarter this year. The company cited ‘challenging market conditions’ as the reason for closure. According to the company, high transportation costs, unfair and cheap imports from China and other countries, high scrap costs and escalating energy bills have made the operation unprofitable.
In a letter issued to customers, the company pointed out that domestic wire rod industry still continues to heavily impacted by dumping of products from China and other countries. Imports accounted for 36% of the wire rod market in the US during the three-month period from January to March this year.
Earlier during economic recession in 2009, Arcelor Mittal had idled the facility, but was reopened during early-February. The mill had incurred huge losses since the restart, on account of rising costs and spiraling imports. The higher cost of scrap in the Southeast region when compared with the Midwest had also added to the cost. Lack of dredging at Georgetown port had forced the company to transport raw materials by truck, making the costs unsustainable.
The mill has a capacity of 300,000 st per annum and employs nearly 226. The closure of the mill is likely to benefit Nucor Darlington and Charter Steel the most. Lower supply may also provide better support to wire rod prices.
The company informed the Mayor that the shutdown is a permanent one. It will co-ordinate with the S.C. Department of Employment and Workforce to formulate a transition plan for the affected workers.
The closure operations are expected to be completed by September 2015.
