SDI idles Minnesota iron ore operations

Steel Dynamics Inc. (SDI), Fort Wayne, Indiana, has announced plans to immediately idle its Minnesota ironmaking operations indefinitely. The operations affected by the shutdown include a jointly owned iron concentrate production facility called Mining Resources and a jointly owned iron nugget production facility called Mesabi Nugget.

SDI’s management and board of directors have elected to idle the operations for an initial 24-month period given what they call the continued significant decline in pig iron pricing, which has resulted in the cost of iron nugget production being higher than the value of the end product.

“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 Millett, SDI CEO. “Current global currency dynamics and world iron ore supply and 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.

“Our Minnesota operations were intended to serve as a hedge to high pig iron and scrap prices,” Millett continues. “While this lower raw material cost environment certainly advantages our steel operations, it has resulted in an uneconomic situation for our iron nugget operations.”

He concludes, “We deeply regret the need to take this action, as the men and women in Minnesota have made great strides in production capability and cost savings relative to this pioneering effort. I commend their dedication, hard work and strong commitment to the company and area communities.”