U.S. Steel will lay off 369 workers in East Chicago, where it plans to idle its tin mill.
The Pittsburgh-based steelmaker notified workers this week it would temporarily idle East Chicago Tin, a finishing plant that makes tin-plated metal largely for canned foods such as soup and vegetables.
The mill, which U.S. Steel acquired in a swap with International Steel Group in 2003, will go back online and bring back the laid-off workers when market conditions improve.
"We will be temporarily idling East Chicago Tin with layoffs beginning in mid-March due to low-priced imports of tin mill products that have severely hampered our business," U.S. Steel spokeswoman Sarah Cassella said. "The idling is temporary but we cannot comment as to the duration."
So far, 2015 has been a dark year for workers at U.S. Steel, which has laid off more than 1,300 employees company-wide as imports have stolen away its market share and failing oil prices have shellacked its tubular steel business.
U.S. Steel also warned the United Steelworkers union this week it will permanently close its coke-making operations at Granite City Works in Illinois, where 176 workers will be laid off. The steelmaker, the second largest in the United States after Nucor, already laid off 756 workers earlier this month when it idled plants in Ohio and Texas that make steel pipe and tube for oil drilling and exploration.
Cassella said the company's announcement only concerned East Chicago Tin when asked about any impact on U.S. Steel operations at Gary Works, the Midwest Plant in Portage, and the Chrome Deposit Corp. in Portage, where it's a 50/50 partner.
Any effect on other Northwest Indiana mills should be minimal because tin products only account for about 2 percent of the market, said Charles Bradford, a steel industry analyst with New York City-based Bradford Research Inc. The tin can market at one point accounted for as much as 5 percent of the demand for steel, but the business has been steadily declining for years, Bradford said.
Aluminum long ago stole away the beer and pop can market from the steel industry. Consumers are increasingly buying more fresh foods and fewer canned vegetables. Soup is often coming in alternative packaging, including plastic pouches, microwavable containers and reinforced paper boxes.
The decline accelerated in 2014. Tin-plated steel dropped from 2.2 percent of the overall steel market at the beginning of the year to just 2 percent at the end of November, according to the American Iron and Steel Institute.
"It's a seasonal business," Bradford said. "Usually the demand is best when the tomato crop comes in, and vegetables are being picked."
U.S. Steel has nearly half the domestic market for tin-plated steel, around 45 percent of it, Bradford said. Not much tin-plated steel is actually imported because it's a small niche market with few buyers, since the United States has only a couple of major canning companies.
But U.S. Steel has been re-evaluating all its operations as part of an ongoing push to cut costs, dubbed the Carnegie Way initiative, after failing to turn a profit over the last five years. The company has lost more than $2.4 billion over that time.