Ice Conditions Slow Steelmaking Operations

AK Steel CEO James Wainscott, in the company’s earnings conference call with analysts, reported that their blast furnaces were running at reduced capacities due to the ice problems on the Great Lakes. US Steel has been upfront by reporting their Gary Works steelmaking operations are running at less than capacity as they struggle to get iron ore through the Soo Locks which is the passageway between Lake Superior and the lower Great Lakes. Other mills are admitting that they are struggling with iron ore shipments as well (see below).

ArcelorMittal USA pointed out to Steel Market Update that the enormous undertaking by the US and Canadian Coast Guard to clear the Great Lakes of ice this year underscores the need for passage of the Water Resources Development Act (WRDA). Over 200 million tons of cargo, including iron ore and coal for steel mills, are shipped every year through the Great Lakes, according to the Great Lakes Environmental Research Laboratory. The WRDA provides authorization and funding for the US Army Corps of Engineers to address water infrastructure needs including the building, upgrade or repair inland waterways and ports. The Senate passed the WRDA in May 2013 and the House passed the Water Resources Reform Development Act (WRRDA) in October, but enactment of the bill is held up over a proposed increase in user fees.