Nearly 400 workers at the Evraz Steel mill in Claymont will be out of work come December.
Evraz announced Monday morning it is suspending operations at its Delaware facility due to “subdued market demand and the high volume of imports.”
The company says its 375 workers in Claymont will finish processing and shipping existing products over the next two months, then prepare the mill for idling. A small crew will remain to maintain the site.
“We appreciate our employees’ efforts to operate Evraz Claymont as efficiently as possible,” said the company’s Executive Vice President for Flat Products and Recycling John Zanieski in a statement. “Unfortunately, market conditions continue to be challenging and low market visibility makes it difficult to foresee when positive changes will occur.”
“Market demand is down because unfairly-traded imports have flooded the flat products (steel plate) market,” Evraz Senior Communications Manager Melodie Ruse told WDDE in an email. “In addition, we supply the infrastructure and construction markets, and neither have been as robust as we would have hoped by this point.”
Customers served by the Claymont mill will be handled by Evraz facilities in Portland, Oregon, and Regina, Saskatchewan after Claymont shuts down in December. Ruse tells WDDE that those facilities are larger and have a lower cost to operate.
The plant makes steel plate and custom plate products for industrial customers. It was purchased in 2008 by Evraz North America.
The company announced in April it was laying off 60 workers, but Delaware Economic Development Office director Alan Levin state officials had no inkling this decision was coming.
“It’s a real kick in the gut, said Levin. “It’s not something, you know, we expected or saw coming, especially base on what they invested in that facility.”
Those investments included $16 million on a new pollution control system unveiled in March.
Evraz officials add that the company will consider restarting operations if market conditions improve and it is working with Gov. Jack Markell’s office to evaluate options for resuming operations.
“We value the support we have received from the Governor, the state of Delaware and the community of Claymont over the years and appreciate their continued support during this challenging time,” said Zanieski in the company’s statement.
Gov. Markell says he’s disappointed by the news, but understands the issues Evraz faces.
“The challenge is [there are] some very cheap imports of steel now that are available,” said Markell. “I think if you combine that with the lack of demand across the country, it’s been tough for that plant.”
The Governor’s office estimates 200 of the 375 affected workers are Delaware residents. Markell says the state will do what it can to help bring the plant back online.
“These are really good jobs and it’s got to be really hard for these families. We’ll certainly do everything we can,” said Markell. “It’s a tough environment given these really cheap imports and the fact that demand is not what it once was.”
Delaware Economic Development Office director Alan Levin adds what the state does in response depends on Evraz and its plans.
“The state is going to work with them to try and find business for them to do. If they ultimately decide to close the facility permanently, we will look to find suitable buyers for the facility, much like we did at Delaware City with the refinery,” said Levin. “We cannot allow that place to just sit closed. We’ve got to get it moving.”
While he says it is “a little early” to suggest the plant will shutter completely, Levin notes the state is already attempting to gauge interest in the facility.
“The Governor’s been reaching out. My office has been reaching out to would be steel manufacturers worldwide, not just in the U.S., and also venture capital firms that may want to buy a steel plant,” said Levin.
Monday’s announcement from Evraz is the second piece of bad news on the jobs’ front for the First State in less than a week. Friday, Georgia-Pacific announced it is shutting down the Color Box packaging plant in Harrington, putting nearly 100 people out of work.
Markell concedes the state does appear at times to be stuck in frustrating pattern.
“Sometimes it does seem like a couple of steps forward and a step back,” said Markell. “The other thing on Friday is Amazon announced instead of having 850 people [employed at their Middletown facility] two years from now, they have 1,600 people today. But, as along as there’s a single Delawarean who’s not working that wants to be, we’ve got a lot of work to do.”