STEELTON, Pa. — Steelmaker Cleveland-Cliffs has announced plans to temporarily but indefinitely close its Steelton plant near Harrisburg, Pa., one of only three locations in the U.S. making railroad rails.
It is one of three U.S. plants the company will close. The others are in Conshohocken, Pa., and Riverdale, Ill.
WHTM-TV reports the closure will begin by June 30, with 500 to 550 union workers losing their jobs. The closure is not related to recent tariffs, a company spokesman told the station.
“These temporary, indefinite idles are a necessary response to insufficient demand and pricing for the products the affected facilities produce, including rail, specialty plate, and high-carbon sheet; all of which fall outside of Cliffs’ core business focus,” the company said in a Friday, May 2, statement reported by the Pittsburgh-Post Gazette. About 950 workers will be affected at the three plants.
The company had previously announced it will idle or partially idle two mines in Minnesota, as well as a steel plant in Dearborn, Mich.
The Steelton plant, with an annual capacity of 300,000 net tons, also makes specialty blooms — semi-finished products that are later turned into steel bars and other items — as well as cast ingots and flat bars, according to Cleveland-Cliffs. It dates to 1866, when it was owned by Pennsylvania Steel Co., and became the first U.S. site dedicated exclusively to steelmaking in 1868. Founded by the Pennsylvania Railroad, it became the first U.S. facility to produce rail for commercial sale.
The plant’s railroad, the 3.7-mile Steeton & Highspire, will also be shut down. The Conshohocken plant, a plate-finishing facility on the Schuylkill River adjacent to Philadelphia, also has its own railroad, the 4.1-mile Upper Merion & Plymouth.
Bad management at Cleveland, if the facilities are not part of your core business…then put them up for sale and at least get some return on your investment. Allow a competitor to take them over, a competitor that those facilities would be a part of their core business…it’s not really a competitor at that point.
Cleveland
Cliffs and the United SteelWorkers Union fought to block the sale of US Steel to Nippon Steel. Nippon was going to invest a billion dollars to upgrade US Steel facilities. Now Cleveland-Cliffs is shutting several operations and they would also be shutting down US Steel facilities if they had purchased the company. If Nippons purchase of US Steel does not happen, we will diffently see the closure of multiple US Steel locations and more unemployed SteelWorkers.
So why does Nippon Steel see new business worth investing in, but Cleveland-Cliffs doesn’t?
Because being Japanese they think long-term, not on just the next quater’s profits.
I keep reading about American companies saying there is no supporting domestic industrial base to support their needs. What they are really saying there is no domestic industrial base that will protect their profit margins.
While its not rail related, Apple has a 300% profit margin on the iPhone, they say they can’t make them in the US, but they wasted $3 billion of those profits just to find out they didn’t want to make a car. They said if they made iPhones in the US, they would cost $3300, as that is what the price would have to be to maintain their 300% profit margin. So they moved the manufacturing to India where they can still maintain a 280% profit margin.
So why is the Steelton plant closing, due to no demand? or the demand is just looking in other places to maintain a ratio?
OK, just what is this thing you’re calling a “Profit Margin”?
People do throw such terms around in a rather loose manner. Just so we all know what you are talking about would you please provide a definition of “Profit Margin” as you are using it.
Profit margin = the amount by which revenue from sales exceeds costs in a business.
Mr. Rice, I seriously doubt your numbers.
In Q1 2024 Apple had $69.7 billion in iPhone sales. The Cost of Goods Sold for those iPhones was $42.2 billion, leaving a margin (margin does not equal profit) of $27.5 billion.
That’s a very good margin, but it’s nowhere near the 300% you are falsely citing.
That’s a nice looking SW9. Hopefully it’ll be back in business hauling steel again soon.
Is closing the Riverdale Plant mean an end to the NS Bottle Trains along the IHB?
Have to wonder why the various RRs and agencies do not stock up on rail. When demand increases the price will be much higher. That might call for the RR to lay out some rail that will not be installed for a couple years or longer. This may explain why CSX on our local siding replaced the rail with a heavier rail last month although heavier not needed as siding speed ~ 25 MPH.
UP has a dedicated ship to bring rail from east Asia.
Class 1s don’t invest in capacity additions, so why buy more rail?
Steelton Rail is all I see anywhere, who else produces rail?
Steel Dynamics Inc. (SDI) makes rail and structural steel at their Columbia City, Indiana plant.
Evraz Rocky Mountain Steel (formerly CF&I) in Pueblo, Colorado.