Allegheny Technologies (ATI) plans to idle the Direct Roll Anneal and Pickle (DRAP) operations at A&T Stainless in Midland, Pennsylvania as a 25pc import tariff on raw material has made the business unsustainable.
ATI is a 50pc stakeholder in A&T Stainless. Under Sec 232 A&T is subject to a 25pc tariff on all the stainless steel slabs it imports into the US as raw material to produce its 60-inch wide sheets.
A&T Stainless has paid over $37mn in tariffs for imported semi-finished stainless slab products sourced from Indonesia since March 2018. Several tariff exclusion requests were filed by the company and denied by the US Department of Commerce in the past two years. The latest request remains pending with the US Commerce, the company alleged.
ATI has no viable alternative to imports and has suffered losses under the tariff policy, said Robert S. Wetherbee, president and chief executive officer of ATI in a press release. Wetherbee added that while ATI meets the criteria for an exclusion, the entity cannot wait any longer and will be idling the Midland facility unless a tariff exclusion is achieved prior to June. Customers will be serviced until June end as the facility will be idled in an orderly manner to allow operations to resume if the tariff policies change. A&T Stainless plans to layoff 70 employees at the site.
ATI has $4bn in annual revenue and serves a diverse clientele including the aerospace industry. The specialty products made by ATI may accelerate the exemption evaluation by US Commerce.