More than seven months after it closed, the future of the steel mill in Claymont is uncertain, as the company says it is continuing to mull its viability.
The mill shut down in December amid lagging market demand, and 375 people lost their jobs. At the time, the company announced there was a possibility it could reopen if market conditions improve.
Despite concern about the mill’s future by numerous members of the Claymont community, Melodie Ruse, the spokeswoman for Evraz, the mill’s Russian owner, said “we have not made ANY decisions,” including whether to dismantle or sell the facility.
Evraz, she said, continues “to pursue a number of options regarding the Claymont facility, working diligently to find a solution that is best for the community of Claymont, the state of Delaware and Evraz.”
Alan Levin, state economic development director, said the state is in “continuous communications” with Evraz and its representatives. The state’s understanding is that no decision has been made, said Levin, who added that the state’s first choice would be restarting it as a steel mill.
“I think they’re still exploring all their options,” Levin said. They could start it up, sell it as a steel plant to someone else, or to an investor who would need to dismantle the plant and perform an environmental cleanup on the land, he said.
“Nothing has been dismantled, it’s just been idled,” Levin said. There are still 10-15 people there taking care of the mill and the property, he said.
In June, Delaware environmental regulators told The News Journal they commissioned a wide ranging review of the the 425-acre plant to document pollution risks. Collin O’Mara, then state natural resources secretary, said last month it was to prepare for changes in ownership or use; Evraz did not support the assessment.
John Griggs, a longtime employee at the mill who lost his job when it was closed, said he found work a month later for an engineering firm in Exton, Pennsylvania. He said he’s making a better salary and benefits. His new job involves traveling, rather than going to the mill every day. “It’s a different life,” he said.
Despite Ruse’s comments, Griggs said he has heard from friends who used to work at the mill that it was being sold for scrap.
The global steel market is still plagued by an overcapacity of steel mills, mostly in China, which overbuilt as if the economy would continue to grow at a fast clip, said John Anton, steel analyst at IHS Global Insight.
China now makes half the steel in the world, he said. Owners of steel mills around the world are waiting for mills in China to close so it becomes more economically viable to produce steel, he said. With a weak dollar, there is some incentive to produce steel in this country rather than relying on expensive imports, Anton said. But, he said, “mills here are not healthy. They’re right at the red-black margin.”
Nevertheless, the Claymont plant has some advantages, Anton said. There are some mills that are very expensive to idle and even more expensive to restart after being completely turned off, he said. The Claymont plant is an electric furnace mill that wouldn’t cost as much to restart, he said.
It made steel plate, for products that are more in demand, such as heavy equipment like cranes and rail cars, Anton said. Business and government construction is expected to pick up next year, and with it, the heavy equipment market should improve as well, he said. But it would help this mill’s cause to see less worldwide steel-making capacity, he said.
“I would say I am not calling this a dead mill. I am not calling this a lost cause, but I’m not going to put every penny of my bank account into it either,” Anton said.
The mill was about 95 years old when it closed, opening in 1918 as Worth Steel Co. Phoenix Steel Corp. purchased it in 1960, and it was bought out of bankruptcy by CitiSteel in 1988, and by H.I.G. Capital in 2005. It was purchased by Evraz for $564.8 million in 2007.
Source – The News Journal