America’s post-crisis reindustrialization and rail projects have provided greener pastures for Evraz, but now Russia’s largest steel producer will suspend operations at a Delaware plant after a sharp fall in metals prices and weak market conditions.
The Claymont, Delaware, mill will wind-down operations over the next two months and nearly all of the plant’s 375 employees will be laid off. The company is evaluating different scenarios under which it can reopen the 500,000 ton-capacity plant.
Evraz, America’s number one rail producer, said that it doesn’t expect a financial loss tied to the closure, and current Claymont customers will be served by one of the other seven operational production units in North America, five in Canada, and two in the US states of Oregon and Colorado, where demand for rail is high.
“Unfortunately, market conditions continue to be challenging and low market visibility makes it difficult to foresee when positive changes will occur,” executive Vice President John Zanieski said in a statement on October 14.
“Fundamentally, [the closure] confirms the problem of the steel market and shows the damaging effects when Russian steelmakers expand abroad,” Kirill Chuyko, head of equity research at BCS, a Moscow-based investment firm, said.
In the first half of 2013, Evraz net income decreased by 21 percent, or nearly $939 million due to the sharp price decline in coal, metals, and other raw materials, which have hit mining and steel companies, many of which are Russian.