U.S. Steel could restart its Keetac facility by the end of the year, the company said in an earnings call Friday morning.
The iron ore mine and pellet processing plant in Keewatin has been indefinitely idled since May, leaving 375 employees out of work, and is the only Iron Range mine still shuttered after a wave of pandemic-induced shutdowns.
U.S. Steel CEO David Burritt told investors the company is considering reopening Keetac to rebuild an inventory of iron ore pellets before locks on the Great Lakes close for winter.
The Soo Locks, which connect Lake Superior to the rest of the Great Lakes, are generally closed mid-January to mid-March due to ice. Ships loaded with ore in Lake Superior pass through the locks to reach steel mills along other Great Lakes.
A footnote in the company's slideshow said U.S. Steel was "evaluating a potential restart of Keetac by year-end."
"To be sure we are prepared for the continued strong demand expected this winter, we are analyzing timing around restarting our Keetac iron ore pellet facility," Burritt said in the call. "The incremental iron ore production will be risked our current blast furnace configuration so we have the right inventory to meet customer demand while the locks are closed on the Great Lakes."
Asked by an investor if the potential restart of Keetac was connected to a potential restart of any idled U.S. Steel blast furnaces, Burritt said it was all about making sure they had sufficient pellet inventory before the locks closed — for themselves and for their customers.
"This decision, if we make it, will be to make sure we get through the winter months, as it's clearly inventory related tied with our customers," Burritt said.
Dan Pierce, a diesel mechanic at Keetac and president Steelworkers Local 2660, which represents workers at Keetac, said he was listening to the earnings call Friday morning. While he said he was "optimistic" about the news, he declined to comment further without knowing more details
Demand for steel improving
As COVID-19 restrictions went into place this spring, demand for steel plummeted. Layoffs and shutdowns at Iron Range mines soon followed. All but Keetac are back online.
The country's blast furnace utilization fell from 81.6% on March 7 to 51.1% on May 2. Last week, it reached 69.7%, according to the American Iron and Steel Institute.
It's a promising sign, Burritt said.
"We believe today's market demand is sustainable and will continue into next year," Burritt said. "As vacations, movies, concerts and dining out have been replaced by vehicle and appliance sales and home improvement projects, we have continued to see a noticeable increase in steel demand."
U.S. Steel loses big in third quarter
Despite promising demand forecasts, U.S. Steel lost big in the third quarter of 2020.
U.S. Steel recorded a net loss of $268 million, or $1.21 per diluted share in the quarter ending Sept. 30. That compares to a loss of $35 million, or 21 cents per diluted share, in the third quarter of 2019. Through the end of September, the company has lost $860 million so far this year compared to a profit of $124 million during the same period in 2019.