Grupo Simec to idle steelmaking operations indefinitely at two Republic Steel mills

Grupo Simec, an international producer of special bar quality (SBQ) steel, steel wire, rebar, and commercial and structural steel long products, has announced it will indefinitely idle steelmaking operations at its Republic Steel mills in Canton, Ohio, and Lackawanna, N.Y.

During the idling, Republic Steel's U.S. customers will be served via Grupo Simec's steel mill in Tlaxcala, Mexico. As a result of the consolidation, about 500 Republic Steel employees will be furloughed indefinitely.

"We're facing an extremely challenging SBQ market in the U.S., with competitive market pricing and decreased demand," said Jaime Vigil, Republic Steel board member and executive advisor. "At the same time, we've had to deal with increasing input costs on all raw materials, consumables, and labor, all as a result of the inflationary environment in the U.S. over the past year."

Vigil said there was hope that inflationary pressures would ease and that Republic Steel would experience a bump in business following the passages of the Infrastructure Bill in 2021 and the Inflation Reduction Act in 2022, but neither came to fruition in a timely manner.

Although Republic Steel has, for the past two years, remained in strict compliance with the National Ambient Air Quality Standards for the production of leaded steel, ensuring future environmental compliance while producing steel in facilities that are up to 125 years old proved to be too challenging. As a result, Grupo Simec felt it would be most environmentally responsible to do so at its new mill in Tlaxcala.

"This isn't an easy decision," said Vigil. "But we feel it's the only way for us to continue to serve our U.S. customer base with an ongoing and reliable supply of product, including leaded steel, and to do so at a competitive price point. Ultimately, we're responsible to our shareholders and our customers. We're simply doing what needs to be done to meet our responsibilities."