Allegheny Technologies Incorporated (ATI) announced that its 50% owned A&T Stainless joint venture plans to idle its Direct Roll Anneal and Pickle (DRAP) operations in Midland, Pennsylvania by the end of June 2020 due to Section 232 tariffs that make the business unsustainable. A&T Stainless has alerted the nearly 70 Midland-based employees that the DRAP will be idled by the end of the Q2 2020.
A&T Stainless imports semi-finished stainless slab products from Indonesia to produce 60-inch wide stainless sheet products. Subject to the 25% tariff levied on all stainless steel products imported into the United States under Section 232, A&T Stainless has paid over USD 37M in tariffs. ATI’s 2019 financial results included USD 19.3M of losses for its share of A&T Stainless results, which included an impairment charge for the Midland facility as well as a USD 4.3M reserve based on ATI’s share of the estimated fair value of the joint venture’s net assets.
The DRAP will be idled in a manner that would allow operations to resume if tariff policies were substantially changed.
