Warren Steel Holdings to Temporarily Idle Plant
WARREN, Ohio – Warren Steel Holdings has announced it will shutter its operations on Mahoning Avenue by the end of this month.
A statement issued by the company says that market conditions have forced it to “temporarily shut down steelmaking operations at Warren Steel Holdings.” The company said it expects to restart operations by the first quarter of 2016, depending on the market.
“Given the current challenging market conditions, we have made the difficult decision to temporarily shut down steelmaking operations at Warren Steel Holdings,” the company said. “Our current expectation is to restart production sometime in the 1st Quarter of 2016, contingent on market and business conditions at that time.”
About 150 employees would be affected by the shutdown, according to United Steelworkers Local 1375.
In March 2014, Warren Steel Holdings shut down operations at the site because of what it called were higher energy and electricity costs. The company successfully petitioned the Public Utilities Commission of Ohio for reduced rates, and reopened the mill in August 2014. There were no layoffs at the time.
As part of the PUCA agreement, Warren Steel committed to employ 200 employees and 25 contract workers, and invest $10 million in capital improvements within the first 12 months after the plant was re-commissioned, and $33 million over the five-year term of the reduced rate agreement.
Warren Steel anticipated then it could increase its workforce to 374 people
In the year since, the domestic steel industry has been under stress because of an increase of foreign imports and the strong dollar. A strong dollar allows foreign competition to ship their products to the United States at a cheaper rate, while making it more difficult for U.S. companies to sell steel on the international market.
At the same time, the collapse in oil prices this year has led to a drop in business for pipe and tube companies. Vallourec Star, which operates a tube plant in Youngstown, announced recently it would place more employees on layoff.
Earlier this year, U.S. Steel shut down its pipe and tube plant in Loraine because of the collapse in oil prices. Companies such as Vallourec and U.S. Steel are major customers of Warren Steel Holdings.
This summer, a major investor sued Warren Steel, alleging he was swindled out of nearly $30 million he put up as seed money when the company started up at the former CSC Ltd. plant in 2001. That suit is pending in Trumbull County Common Pleas Court.
Pictured: Interior of Warren Steel Holdings plant in Warren.
Copyright 2024 The Business Journal, Youngstown, Ohio.
