Severstal Idling Ohio Furnace

Company will idle its electric arc furnace in Mingo Junction, Ohio, next month because of poor steel market conditions.

MORGANTOWN, W.Va. (AP) -- Russian-owned steelmaker Severstal North America said Friday it will idle its electric arc furnace in Mingo Junction, Ohio, in February because of poor steel market conditions.

Company spokesman Michael Henson couldn't provide a firm date for the shutdown or say how many employees will be affected. The idling will last, he said, "until market conditions improve."

Severstal had begun temporary layoffs at its U.S. facilities in December. They were occurring at different times in different locations, but affected operations in Wheeling, W.Va.; Warren, Ohio; Sparrows Point, Md., and Dearborn, Mich.

The $115 million electric furnace, built when the Ohio operation was still owned by Wheeling-Pittsburgh Steel Corp., is only five years old and has never been taken to its full capacity of nearly 2.5 million tons a year.

Severstal inherited it last year, when it acquired Esmark Inc. for $775 million, plus the assumption of debt and loans, or a total of $1.25 billion. The Wheeling-Pitt subsidiary, which has 2,000 union employees in Ohio, West Virginia and Pennsylvania, is now called Severstal Wheeling Inc.

The company had also promised a $250 million capital investment in its U.S. operations.

The United Steelworkers, which represents a total of 6,000 Severstal employees, did not immediately comment on the furnace shutdown.

However, "This is a cooperative process," Henson said. "The union is very realistic about what the market is like for Severstal and all of Severstal's peers in the U.S. steel industry."

When it began layoffs, Severstal said the impact on workers would vary weekly, depending on production needs.

Severstal North America is a subsidiary of Russia's OAO Severstal, which reported 2007 sales of $15.2 billion and a profit of $1.97 billion.

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