US Steel evaluates end-2020 restart at Keetac iron ore pellet mine

US Steel said Oct. 30 it is evaluating a potential restart at its Keetac iron ore pellet operation in Minnesota at year-end, reversing earlier guidance that the facility was indefinitely idled.

Keetac, with 6 million st/year of pellet capacity, has been idle since May, while US Steel's Minntac operation, with 16.4 million st/year of capacity, is operating, based on US Steel operational data reported in a presentation to investors.

US Steel in April said it would indefinitely idle the Keetac iron ore operations as it adjusted production levels based on shifting steel demand from the coronavirus pandemic.

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Mining group Cleveland-Cliffs in September said it is acquiring ArcelorMittal USA, which, if finalized, would increase the Cleveland-based company's share of US iron ore pellets and turn it into the largest US integrated steel producer, eclipsing US Steel.

The new merged group would have 28 million long tons/year of iron ore pellet capacity, up from Cliffs' 20 million lt/year capacity alone, through assuming operating interests held by ArcelorMittal at the Hibbing Taconite and Minorca operations, both in Minnesota. A long ton is equivalent to 1.12 short tons.

ArcelorMittal holds a 62.3% stake in the Hibbing pellet complex. Cliffs has a 23% stake in Hibbing already, with US Steel owing the remainder.

Contract pellet premiums tracked by S&P Global Platts have sunk to multi-year lows this year, on weak demand, with US-origin pellets heard offered spot into Europe in the past few months. Cliffs is currently commissioning its new hot briquetted iron facility in Toledo, Ohio, and plans to supply HBI both internally and to other external EAF mills.

US steel raw materials demand is increasing, as utilization rates recover, and blast furnaces restart. US EAF mills increasingly need metallics produced from iron ore, based on steel product plans and yields, with wider US flat steel-to-scrap steel margins supporting productivity.

At US Steel's Clairton coke works, the Pennsylvania facility is operating with extended coking times, with no change to the profile from earlier this year, the report showed.

Operating extended coking times may allows for lower quality met coals to be utilized in the blend, as coke yields and productivity are not a priority.

US Steel said in its Q3 results that its US flat-rolled steel business benefited from lower year-on-year costs for coking coal and purchased scrap.

In Europe, US Steel Kosice benefited from the lower cost of iron ore pellets and coking coal in Q3 than a year earlier, it added.

US blast furnaces are set up to use iron ore pellets rather than sinter.

US Steel is operating units currently at Gary, Indiana; Granite City, Illinois; and at Mon Valley Works, Pennsylvania as well as in Kosice, Slovakia. The company has 2.9 million st/year of BF capacity currently idled in the US.