U.S. Steel’s Alabama Furnace Plan on Schedule

U.S. Steel Corp. says that the new electric arc furnace at its Fairfield Works facility outside Birmingham will be completed on schedule, in the second half of 2016.

That furnace will replace an aging blast furnace that is being idled, a move that could result in the loss of over 600 jobs starting this month, according to a report from the Birmingham Business Journal.

EAF technology allows for a much less labor-intensive process, but yields a higher output than traditional integrated facilities such as the blast furnace. It depends on recycled scrap metal such as cars and appliances (about 65% of homeowners now prefer stainless steel appliances), rather than traditional iron ore and metallurgical coal.

The changing production method is in line with U.S. Steel’s “Carnegie Way” initiative, which comprises a number of changes attempting to improve operational flexibility and cut costs with the goal of gaining a stronger position over competitors such as Nucor Corp.

Nucor was the first company to successfully incorporate EAF technology into its “mini mill” production process, a much leaner version of steel production. Despite having fewer employees than U.S. Steel, Nucor has a higher production capacity and pulled in about seven times U.S. Steel’s profits last year.

Average citizens may give little thought to steel production unless they work in the field, but it is an industry that has seen major ups and downs in recent decades — with those ups and downs heavily affecting Alabama workers.

In particular, the domestic steel market is struggling to recover after foreign overproduction between the end of 2014 and the present has put pressure on U.S. steel manufacturers.

Founded in 1901, U.S. Steel was once the largest steel producer as well as the largest single corporation in the world. But it has seen massive layoffs just in the past few years. As of Aug. 13, its stock was trading weakly, with analysts recommending it as a buy.

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