June 10, 2015
SDI Idles Minnesota Ironmaking Operations
Steel Dynamics, Inc., the Fort Wayne, Ind.-based minimill operator, has idled its Minnesota ironmaking operations in Chisholm and Hoyt Lake. The operations are comprised of jointly owned iron concentrate and iron nugget production facilities. Management and the company's board of directors have elected to idle the operations for an initial 24-month period due to the continued decline in pig iron pricing. The cost of iron nugget production is now too high, relative to market prices.
"With this action, we are actively responding to the unprecedented decline in iron ore pricing, which recently led to an extreme decrease in pricing for pig iron, our end product," says Mark D. Millett, CEO. "Current global currency dynamics and world iron ore supply-demand factors support lower pig iron prices. We currently do not see strong drivers that would suggest a reversal of this trend for some time.”
SDI’s Minnesota operations were designed to serve as a hedge to high pig iron and scrap prices. While today’s low cost for raw materials benefits the company’s steel operations, it creates an uneconomical situation for its iron nugget operations, executives say. Moreover, experts forecast up to another two years of soft iron ore prices before any recovery in the market.