Eastern Railroad Discussion > US Steel seeks to "repurpose" Granite City Works

Granite City Works, one of three landlocked (read: mostly rail-dependent) integrated steel mills left in the US, has been slated by owner US Steel to be repurposed into a pig iron facility in the next few years. While the plans have not been finalized, they include exiting the steelmaking portion of Granite City and selling the 2 blast furnaces to Suncoke Energy to have them produce granulated pig iron for shipment to other facilities for steelmaking, such as EAF sites already owned by USS. Suncoke currently makes coke for Granite City next door and would apparently keep making it and use USS derived taconite as feedstock for the BFs. It appears 1,000 jobs would be lost and the finished product output would change, but from a railroad standpoint the facility would still receive coal, short-haul coke and taconite, while shipping out the pig iron pellets by rail as well. This would supposedly be for at least 10 guaranteed years, but how it actually plays out remains to be seen. If interested, read more here:
https://www.businesswire.com/news/home/20220627005819/en/
JG

US Steel is also planning on modifying one of its two Taconite plants in Minnesota to produce DR grade pellets which can be directly used in electric arc furnaces of mini-mills to produce steel.

"DR grade" -- does that mean some percentage of iron, or what?

What are the other two landlocked integrated plants?



Edited 1 time(s). Last edit at 07/02/22 09:09 by timz.

Very sad news. But at least not a total shutdown - the two blast furnaces in the Ironmaking Dept. will remain in service producing pig iron, and there will be a new facility added for manufacturing the Direct Reduction (DR) pellets from that iron. But the loss of about 1,000 well-paying jobs on the steelmaking side of the mill will hurt - a lot. That will put a lot of good people out of work at a time when there is a prospect of a softening economy and a possible recession looming on the horizon. And where there is already high inflation that will eat into their family budgets at a difficult time. The impact on the St. Louis-area economy will be palpable, and unfortunate.

On the other hand, employment needs in the general economy remain high, at least for now. One hopes that many of these men and women will be able to quickly secure another good job, or enter and complete a training program in enough time to secure a new job at a relatively good wage and benefit package - and a job that just might survive if we do indeed have a recession. Those now in maintenance positions at the mill will probably have the best chance to quickly secure a new job within their craft, hopefully at fairly comparable wages and benefits. Many employers are still strongly seeking qualified electricians, welders, pipefitters, millwrights, machinist-mechanics and other maintenance crafts.

As a longtime St. Louisan, I have had acquaintances with many Granite City Steel folks through the years. Almost all are now retired or very close to retirement. Good, hard working, capable folks, all.  Having known them, my heart goes out to those in a younger generation who followed them and kept GSC as a mill with a good reputation for the quality of its flat-rolled steel products, from its days many years ago as an independent mill, all the way through several successive owners up to US Steel today.

It's probably correct that rail traffic for the remaining ironmaking facilities at the mill will not appreciably change, at least initially. Inbound metallurgical coal, iron pellets from Minnesota, and limestone flux traffic probably won't change, either in type, nor routing. TRRA will still handle the final switch of these commodities into the mill and the coke facility across Ill. Hwy. 203 from the blast furnace shop. And rail will at least initially have the outbound haul of the iron to the USS-subsidiary Big River Steel mill at Osceola, Arkansas. Likely routing will be TRRA delivery to an interchange point with BNSF (ex-Frisco), perhaps Lindenwood Yard in southwestern St. Louis. BNSF will haul the DR iron to Big River via the ex-Frisco River Sub down the Mississippi River valley to Osceola.

But the substantial outbound coil steel traffic that used to go by rail in several directions out of St. Louis will be lost. That will be a big ouch, first to TRRA in losing the switch at the mill and forwarding it to Class One carriers. And then to those carriers who will lose the outbound finished steel line haul.

In the long run, US Steel has another option for the new outbound DR traffic - by barge down the Mississippi. Particularly in light of the current service meltdown, BNSF will have to exercise care to provide good service to this new traffic. US Steel won't play around. Its Big River Steel mill in Osceola, Ark, that will receive the DR iron from Granite City is rapidly becoming a premier facility for them as they ramp up Electric Arc Furnace (EAF) production there. The Mississippi is not far from the Granite City mill, and it would not be overly challenging to USS either on its own or with a partner to develop dock facilities for barge loading, if indeed a facility with such capability does not already exist. That would leave only a short switch by TRRA to the dock as a rail move.

At the receiving end, the Osceola mill already has some basic river docks, which from aerial photos appear to be used now for inbound limestone flux traffic and other traffic from Vulcan Materials (a partner to Big River Steel?), and which could be expanded / modified for the DR iron traffic. A rail spur off BNSF circles the plant, and the aerials show inbound gondolas with scrap for the EAF furnace (which the new DR iron will perhaps either replace or supplement), and outbound coil steel cars of finished product. This is very good traffic now and into the future for BNSF.

But -- I can virtually guarantee that the barge guys are waiting and working up proposals. And US Steel, a highly experienced marine operator on the Great Lakes, will give them a hearing, and have contingency plans in its pocket. It would take some capital investment on USS' part to go to water transport, but they are already sinking a lot into Big River Steel and the conversion at Granite City. They are not going to mess around with poor rail service or high rates. And if rail loses the traffic either on service or rates, it will be gone for at least a good long time, and perhaps forever. BNSF is lucky in having the Big River Steel facility on a line which now does not have a lot of traffic, and which has the capacity available. But they still have to work hard not to squander their advantage. Don't screw it up, BNSF!

I grew up in the St. Louis area with Granite City Steel very much a part of my life. It is truly sad to see the steelmaking facilities close. One hopes for the best for the affected workers, and for their communities. Once again, technology and time sails on. Let us hope that it will not leave much loss in its wake.

MC

(Sorry for the long text lines and need to scroll horizontally. The word-wrap feature of the posting module is apparently broken. Message for repair will go to the Webmaster. -- MC)



Edited 2 time(s). Last edit at 07/02/22 11:55 by ironmtn.

That's a good appraisal of the situation, thanks for sharing it.  The barge option sounds like it may get a workout.

USX's investment in the Big River steel complex is a game changer for steel production in the central US.

timz Wrote:
-------------------------------------------------------
> "DR grade" -- does that mean some percentage of
> iron, or what?

DR-grade pellets are a higher grade of iron pellet that can be smelted in a blast furnace or a Direct Reduced iron facility, like Cliffs new HBI plant in Toledo. DR pellets can also be used as a supplement in EAFs, but not a true replacement for scrap. The iron content in DR (around 90%) is higher than typical pellets and currently only Cliffs can make this type of pellet on the iron range. This is what USS wants to start doing with this deal. These steps make the steelmaking process cleaner, more efficient and less costly.

> What are the other two landlocked integrated
> plants?

USS ET Works in Braddock, PA., and Cliffs mill in Middletown, OH.

JG



Edited 1 time(s). Last edit at 07/02/22 12:58 by jgilmore.

ET Works counts as "landlocked"? The river
there isn't barge-able?

timz Wrote:
-------------------------------------------------------
> ET Works counts as "landlocked"? The river
> there isn't barge-able?

Well, compared to the other mills left it is. The Mon River is navigable and the Clairton Coke Works may receive met coal by barge as well as rail, but the coke actually moves to the BFs by rail along the URR and the taconite comes by rail down the BLE. Slabs move to Irvin by rail and coils leave by rail and truck. I guess that description is open to interpretation...

JG

jgilmore Wrote:
-------------------------------------------------------
> timz Wrote:
> --------------------------------------------------
> -----
> > ET Works counts as "landlocked"? The river
> > there isn't barge-able?
>
> Well, compared to the other mills left it is. The
> Mon River is navigable and the Clairton Coke Works
> may receive met coal by barge as well as rail, but
> the coke actually moves to the BFs by rail along
> the URR and the taconite comes by rail down the
> BLE. Slabs move to Irvin by rail and coils leave
> by rail and truck. I guess that description is
> open to interpretation...
>
> JG

All met coal for Clairton arrives by barge, but JG is right that all of the inbound raw materials (coke from Clairton, taconite from Conneaut, limestone and scrap for the BOF arrives by rail) and all of the slabs ET produces move by rail to Irvin for finishing to coils.

Posted from iPhone

US Steel no longer has any marine operations on the Great Lakes and hasn't for almost twenty years now. I doubt if anyone with experience in marine operations are left in the company. DR grade pellets reduce the amount of material that needs to be shipped by rail or laker.



Edited 1 time(s). Last edit at 07/02/22 23:35 by SOO6617.

SOO6617 Wrote:
-------------------------------------------------------
> US Steel no longer has any marine operations on
> the Great Lakes and hasn't for almost twenty years
> now. I doubt if anyone with experience in marine
> operations are left in the company. DR grade
> pellets reduce the amount of material that needs
> to be shipped by rail or laker.

I think that in the above post that you are commenting upon the following statement in my long post above:

ironmtn Wrote:
-------------------------------------------------------

> But -- I can virtually guarantee that the barge
> guys are waiting and working up proposals. And US
> Steel, a highly experienced marine operator on the
> Great Lakes, will give them a hearing, and have
> contingency plans in its pocket.

When I wrote that, I knew full well that US Steel had not been an operator of bulk freighters on the Great Lakes for many years. Probably a number of other TO members know that as well, although some may not have known about those former operations, or had forgotten that US Steel had spun them off to other independent operators some time ago.

But actual operation of bulk freighters on the Lakes, or barge tows on the inland rivers, is not the only aspect of being a "marine operator". It includes many aspects of supply coordination for inbound materials traffic via Great Lakes bulk carrier, or barge. 
** Vessel chartering and scheduling
** Coordinating docking, and managing and keeping ready docking facilities
** Coordinating unloading, and material handling during initial unloading

These are the kinds of activities that I was thinking of when I stated that US Steel was an experienced "marine operator". And they are all practiced in depth daily at US Steel facilities like Gary Works in Gary, Indiana, on the southern shore of Lake Michigan, where taconite pellets and limestone for flux are regularly received by lake bulk freighters. And perhaps at other US Steel facilities as well. I would think that the former Great Lakes Steel mill at Ecorse, Mich. on the Detroit River would also qualify for Great Lakes bulk freighter traffic, and perhaps also the Clairton, Pa. coke facility mentioned above for river barge operations.

Today, such activities are all probably subsumed (as are rail and truck traffic) under a broad label of Logistics, with some department like that at US Steel. But there are lots of entities and onshore-only operators on the Great Lakes and the inland waterways whose only functions and business are to provide shoreside docking-related and vessel-servicing functions, and who certainly consider themselves to be "marine operators", or to be engaged in "marine operations."

I could have been more precise and said that US Steel was a highly experienced "shoreside marine operator", or some such phrase.

But I also don't think it's accurate to say, "I doubt if anyone with experience in marine operations are left in the company." At the least Gary Works, US Steel's largest facility, engages deeply and regularly in marine-related operations for a great deal of its supply chain via Great Lakes bulk freighters. And I can't imagine that there aren't any people in their Logistics operations (or whatever they call it) who don't have considerable experience in marine operations -  at least in its shoreside aspects - and who very well may also have served aboard an inland river barge towboat, or a Great Lakes bulk freighter, whether it ran in the former US Steel fleet, or with another operator.

MC
Muskegon, Michigan

Former Curator
Herman T. Pott National Inland Waterways Library
St. Louis Mercantile Library Association