Steel Mills

NLMK USA, USW Remain at Loggerheads Despite Slab Availability

January 6, 2021

NLMK USA and striking workers at its operations in western Pennsylvania appear no closer to a labor accord than they were more than four months ago.

And the two sides remain at loggerheads despite near-record hot-rolled coil prices and despite slab being available following the reset of the Section 232 quota on Brazilian semi-finished goods.

“The company and the union remain very far apart. However, we are always open to bargain in good faith and listen to the union’s proposals,” NLMK USA President and CEO Robert D. Miller said in an email to Steel Market Update.

Healthcare issues remain “the biggest challenge” when it comes to reaching a deal with United Steelworkers (USW) union members, Miller said.

A USW spokeswoman did not immediately respond to a request for comment for this article.

Members of USW Local 1016-3, which represents NLMK’s operations in Farrell, Pa., have been on strike since late August.

Hot-rolled coil prices averaged $485 per ton in late August. They have since more than doubled to an average of $1,010 per ton this week, according to SMU pricing records.

NLMK has been able to continue to produce steel using management personnel, but at a significantly slower rate than would be possible with union members back on the job, industry sources have told SMU.

Some market participants had predicted that the company and the union would come to an agreement given the highest sheet prices since 2008 and once slab was more plentiful in 2021. That has not proven to be the case.

Slab was difficult to secure in the fourth quarter because the Trump administration reduced Brazil’s Section 232 quota allotment. And re-rollers, such as NLMK Pennsylvania, have in recent years relied heavily on Brazilian slab because it is exempt from the 25% Section 232 tariff on semi-finished goods from most other nations.

NLMK previously had relied primarily on slab from its parent company in Russia. But that arrangement became less economical with the imposition of Section 232 tariffs in 2018.

The strike at NLMK is important to the broader steel sector because the company is a significant supplier to the spot market in the Midwest. And spot supplies have been squeezed in the region because of rebounding demand following the outbreak of the Covid-19 pandemic colliding with idled capacity (notably at former ArcelorMittal USA mills), an outage at JSW Steel USA in Ohio, and limited spot availability at other mills.

NLMK operates an electric-arc furnace (EAF) mill in Portage, Ind., in addition to its slab-rerolling and downstream sheet processing operations in Pennsylvania.

By Michael Cowden, michael@steelmarketupdate.com

Michael Cowden

Michael Cowden is editor-in-chief for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.