Thousands of steelworkers and their families have received some disheartening news on the cusp of the holiday season. Pittsburgh-based U.S. Steel, one of the nation's largest steel producers, said Monday it will temporarily idle operations at its plant in Granite City, Illinois, indefinitely laying off about 2,000 workers.

“You always hear rumors at the mill and most of us knew something was coming,” Randy Jones, 57, a veteran steelworker at Granite City, said. “How hard would it have been to wait until after Thanksgiving?”

The move is the latest sign of the struggling domestic steel industry. In a statement, U.S. Steel blamed the temporary closure on tough market conditions “including fluctuating oil prices, reduced rig counts and associated inventory overhang, depressed steel prices and unfairly traded imports.”

The company sent notices to workers last month warning them it may soon be forced to temporarily idle operations. According to U.S. Steel, the Granite City mill is the “primary flat-roll supplier of the oil and gas industry” -- a sector that has sputtered amid sagging oil prices.

In addition to changes in energy markets, domestic steel producers have struggled to compete with an influx of cheaper foreign-produced steel, much of it from China. That country’s recent slowdown threatens to exacerbate problems for American steelmakers, as Chinese policymakers look to boost exports and more steel hits the global market.


Earlier this year, U.S. Steel permanently shuttered a longtime plant outside of Birmingham, Alabama, laying off 1,100 workers. That closure came on the heels of a string of layoffs in Texas, Arkansas, and Indiana, among other states.

Meanwhile, nearly 20,000 U.S. Steel workers are continuing to work without a contract. After its labor agreement with the United Steelworkers union expired in September, the corporation has continued to demand concessions.

Earlier this year, tough contract talks at another domestic steel company -- Pittsburgh-based Allegheny Technologies -- resulted in a lockout that recently passed the 90-day mark. That dispute has forced more than 2,000 workers off the job.

Steelmakers operating in Europe have faced similar woes. Tata Steel announced last month it would lay off 1,200 workers in northern England and Scotland. In addition to high electricity costs and a strong pound, the company blamed the job cuts on “a flood of cheap imports, particularly from China.”

U.S. Steel did not give any indication about when it may restart operations in Granite City. Jones, for his part, says he hopes the plant will be back up again in the spring. In December 2008, the company temporarily idled operations for six months. 

Before the temporary closure announcement on Monday, U.S. Steel's share price hit a new 52-week low of $7.94.