Cleveland-Cliffs plans to produce electrical transformers at its idled Weirton, West Virginia, steel mill, embarking upon a new era of downstream manufacturing for the Ohio-based miner and steelmaker, according to the company’s top executive.

Chairman, president and chief executive officer Lourenco Goncalves says a final decision has been made to retool the century-old steel mill to manufacture transformers. Speaking on the sidelines of the Global Steel Dynamics Forum in New York, Goncalves informs Kallanish that Cliffs is open to a potential partnership with an existing transformer manufacturer, so long as such an arrangement does not delay his plans to open the facility within 1.5 years.

“I’m going downstream!” Goncalves proclaims. Weirton “will produce transformers for the electrical grid. … We have a shortage of transformers right now.”

Earlier this year, steel production at the Weirton facility was indefinitely idled after a US trade decision on tinplate imports found not enough injury to the domestic producers to justify antidumping and countervailing duties (see Kallanish passim). Goncalves says the repurposing of Weirton will save 600 jobs.

“It’s a profitable business. It’s not a massive investment [and] it’s completely accretive,” the ceo explains.

As part of the plan to manufacture transformers, Goncalves says Cliffs will increase production of grain-oriented electrical steel by restoring currently idled capacity at its Butler, Pennsylvania, mill.

The transformation of the Weirton facility to an entirely new function marks a permanent exit from the tinplate business for Cliffs, Goncalves insists. The US customers will live to regret supporting a trade decision that results in the subtraction of domestic supply, he predicts.

“I will never produce tinplate again in this country,” Goncalves declares.

During his scheduled talk at the steel forum, Goncalves urged the US and Canada to decouple from Mexico in what is currently known as the United States-Mexico-Canada Agreement (USMCA), the regional trade pact that replaced Nafta. Goncalves bluntly says the USMCA should “rest in peace” because Mexico has become “a transshipment playground.”

“USMCA will change its name to USCA because Mexico will be gone,” he predicts.

Addressing the currently weak US domestic coil pricing (see Kallanish 12 June), Goncalves explains that most end-user segments are healthy and are consuming and procuring steel. In particular, automotive, energy and other manufacturing are doing fine.

“We are seeing one sector” that has paused its buying at the mill level, he notes. “Service centres are not buying because they think the prices will be lower. … You cannot trade among service centres forever, so it’s a matter of time, then everyone will be completely empty and they’ll have to buy” from producers.