U. S. Steel Announces Update on Metallics Strategy

U.S. Steel Corporation announced it would expand its low-cost iron ore competitive advantage and increase its self-sufficiency by supplying domestic feedstock to its growing fleet of electric arc furnaces (EAFs). The company expects related improvements to its capital and carbon intensity and financial performance from anticipated future internal and external EAF demand.

U. S. Steel plans to break ground in Fall 2022 at one of its two Minnesota Ore Operations facilities, Keetac or Minntac, to construct a system dedicated to producing DR-grade pellets. This will enable one of the company’s existing pelletizing plants to not only create DR-grade pellets but also maintain the optionality to continue producing blast furnace-grade pellets.

DR-grade pellets are a critical feedstock for ironmaking in a direct reduced iron (DRI) or hot briquetted iron (HBI) process that ultimately supplies EAF steelmaking. Upon completion, the company would have the option to sell the new pellets to third-party DRI / HBI producers or use them to feed a potential future DRI or HBI facility of its own. The DR-grade pellets produced would be a new product line for U. S. Steel. The investment and expected timeline are subject to state and local support and receipt of regulatory permitting.

As part of this process, U. S. Steel has signed a Non-Binding Letter of Intent with SunCoke Energy, Inc., a raw material processing and handling company, setting forth the preliminary terms for a potential arrangement under which SunCoke would acquire the two blast furnaces at Granite City Works and build a 2-million-ton granulated pig iron production facility. Upon completion of the proposed facility, SunCoke would supply U. S. Steel access to 100% of the pig iron production for the next 10 years.

"Our conviction remains that steel mined, melted, and made in America is vital to our national and economic security," said David B. Burritt, president & CEO of U. S. Steel. "We are strategically investing in our raw materials that will feed the advanced steel mills of today and tomorrow, making us increasingly self-sufficient. It’s another way that we’re supporting domestic manufacturing, simplifying complex global supply chains, addressing the sustainability demands of our customers, and ultimately creating profitable steel solutions for people and the planet."

In addition, U. S. Steel recently announced an investment in a pig iron caster at Gary Works in Indiana. The approximately $60 million investment will produce up to 500,000 tons of pig iron annually and provide a critical raw material input for the company’s EAFs. Once complete, the Gary pig iron project is expected to provide nearly 50% of Big River Steel’s ore-based metallics needs, contribute over $30 million of run-rate enterprise EBITDA benefits and deliver an internal rate of return in excess of 30%. Pig iron production at Gary Works should begin in the first half of 2023.

For more information, please visit www.ussteel.com.