Cleveland-Cliffs to Idle Weirton Tinplate Facility Following Unfavorable ITC Ruling

Rhea-AI Summary

Cleveland-Cliffs Inc. (NYSE: CLF) announces the indefinite idling of its tinplate production plant in Weirton, West Virginia due to the ITC's rejection of anti-dumping duties. Approximately 900 employees impacted with relocation opportunities or severance packages. Despite evidence of dumping and subsidization, the ITC's decision has led to this outcome. Cliffs maintains its 2024 sales volume guidance of 16.5 million tons.

Positive

• None.

Negative

• The indefinite idling of the Weirton plant due to the rejection of anti-dumping duties by the ITC is a major setback for Cleveland-Cliffs. Approximately 900 employees being impacted and the inability to impose tariffs despite evidence of dumping and subsidization are negative aspects. The company's efforts to save Weirton and maintain tinplate production have been thwarted by the ITC's decision, impacting American jobs and the domestic food supply chain.

Insights

Economist

An analysis of Cleveland-Cliffs Inc.'s decision to idle its Weirton tinplate production plant reveals several economic implications. The idling is a response to the International Trade Commission's (ITC) rejection of anti-dumping and countervailing duties, which would have countered below-market prices on imported tin mill products. This decision affects the domestic market by potentially increasing reliance on foreign tinplate suppliers, which could influence tinplate pricing and availability.

The move to idle the plant will directly impact the local economy of Weirton, West Virginia, with approximately 900 employees receiving WARN notices. While some may find opportunities at other Cleveland-Cliffs facilities or receive severance packages, the loss of employment will likely reduce local spending power and could increase unemployment rates in the region.

In the long term, the absence of tariffs could encourage more competitive pricing strategies among domestic producers to remain viable against imports. However, it also raises concerns about the sustainability of domestic tinplate production and the broader implications for the U.S. steel industry's health and self-sufficiency.

Market Research Analyst

The indefinite idling of Cleveland-Cliffs' Weirton plant has strategic implications for the steel industry. The decision comes after the ITC's ruling against tariffs, which were initially supported by the Department of Commerce due to evidence of dumping and subsidization. This ruling could signal a more challenging environment for U.S. producers facing international competition.

For stakeholders, this development may necessitate a review of supply chain resilience, particularly in the tinplate market. Companies reliant on domestic tinplate may need to reassess their sourcing strategies, potentially looking towards international markets for supply, which could introduce new risks such as currency fluctuations and trade policy changes.

Cleveland-Cliffs' maintenance of its 2024 sales volume guidance despite the Weirton plant idling indicates confidence in its overall production capacity. However, investors and analysts should monitor the company's ability to meet this guidance without the Weirton plant's output and consider the potential for increased operational costs or price adjustments.

Legal Expert

The legal context surrounding the idling of the Weirton plant is rooted in international trade law. The ITC's unanimous decision against the implementation of anti-dumping and countervailing duties, despite the Department of Commerce's findings, illustrates the complexity of such legal decisions. The ITC likely considered the broader economic impact of tariffs, including potential retaliation from trading partners and effects on consumer prices.

The legal process highlights the intricate balance between protecting domestic industries and adhering to international trade agreements. Cleveland-Cliffs' response, suggesting the need for stronger trade laws, points to a potential push for legislative changes to better protect domestic producers. This could lead to a shifting legal landscape for international trade, with implications for companies engaged in cross-border commerce.

Furthermore, the WARN notice issued to the employees complies with federal regulations requiring advance notification of mass layoffs, reflecting the company's adherence to labor laws even amidst adverse business decisions.

CLEVELAND--(BUSINESS WIRE)-- Cleveland-Cliffs Inc. (NYSE: CLF) announced today that it will be indefinitely idling its tinplate production plant located in Weirton, West Virginia in April 2024. The need to idle the Weirton plant is a direct result of the unanimous decision issued by all four members of the International Trade Commission (ITC) negating the implementation of anti-dumping and countervailing duties on tin mill products calculated by the Department of Commerce. A WARN notice is being issued today to approximately 900 impacted employees. These employees will be provided relocation opportunities to work at other Cliffs’ facilities and/or severance packages.

In January 2023, Cleveland-Cliffs and co-petitioners the United Steelworkers (USW) filed antidumping and countervailing duty petitions related to unfairly traded tin and chromium coated sheet steel products. After finding evidence of dumping and subsidization, on January 5, 2024, the Department of Commerce announced duties on four countries, including Canada, China, Germany and South Korea. However, on February 6, 2024, the ITC unanimously rejected these tariffs.

Lourenco Goncalves, Cleveland-Cliffs' Chairman, President and Chief Executive Officer, stated, "We worked very closely with our partners at the USW on this solution to save Weirton, and together fought tirelessly for its survival. In what was our final effort to maintain tinplate production here in America, we proved that we are forced to operate on an uneven playing field, and that the deck was stacked in favor of the importers. Despite the Department of Commerce finding evidence of dumping and subsidization from respondent countries, the ITC shockingly ruled against imposition of tariffs, keeping the uneven playing field in place and making it impossible for us to viably produce tinplate. We have been upfront and open with union leadership throughout this process and our partnership with the USW remains unbreakable.”

Mr. Goncalves continued, “To the tin can makers and consumer groups who irrationally fought against American jobs and a domestic-based food supply chain, this outcome is due to your own greed. We disproved all the arguments leveled against the domestic industry and workers. Furthermore, Weirton recently concluded a successful run of Drawn & Ironed material that tested perfectly with zero defects. This test proves that Weirton and its workers are able to manufacture all the products the market demands. The ITC’s decision is a travesty for America, middle-class jobs, and our critical food supply chains. This bad outcome requires better and stronger trade laws. We will continue to work tirelessly with our Congressional champions who fought with us in this case to improve the trade laws so that the American industry and our workers are not left behind.”

Cliffs is maintaining its 2024 sales volume guidance of 16.5 million tons of overall steel products.

About Cleveland-Cliffs Inc.

Cleveland-Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, Cliffs also is the largest manufacturer of iron ore pellets in North America. The Company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. Cleveland-Cliffs is the largest supplier of steel to the automotive industry in North America and serves a diverse range of other markets due to its comprehensive offering of flat-rolled steel products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 28,000 people across its operations in the United States and Canada.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240215194668/en/

MEDIA CONTACT:

Patricia Persico

Senior Director, Corporate Communications

(216) 694-5316



INVESTOR CONTACT:

James Kerr

Director, Investor Relations

(216) 694-7719

Source: Cleveland-Cliffs Inc.

FAQ

Why is Cleveland-Cliffs indefinitely idling its tinplate production plant in Weirton, West Virginia?

Cleveland-Cliffs is idling its Weirton plant due to the ITC's rejection of anti-dumping and countervailing duties on tin mill products, impacting approximately 900 employees.

What was the outcome of the Department of Commerce's findings on dumping and subsidization of tin and chromium coated sheet steel products?

The Department of Commerce found evidence of dumping and subsidization from countries like Canada, China, Germany, and South Korea, leading to the imposition of duties. However, the ITC rejected these tariffs.

What is Cleveland-Cliffs' response to the ITC's decision?

Cleveland-Cliffs' Chairman, President, and CEO, Lourenco Goncalves, expressed disappointment at the ITC's ruling, highlighting the challenges faced in maintaining tinplate production in America due to an uneven playing field.

How many tons of overall steel products is Cliffs maintaining its 2024 sales volume guidance at?

Cliffs is maintaining its 2024 sales volume guidance at 16.5 million tons of overall steel products despite the idling of the Weirton plant.