Sharply falling oil prices are prompting U.S. Steel to temporarily idle tubular operations in Houston, Texas, and Lorain, Ohio, west of Cleveland, resulting in 756 layoffs.
Most of the layoffs will occur at the Pittsburgh steel producer’s Lorain Tubular Operations, where 614 workers will be laid off. Another 142 workers at the Houston plant will be affected.
The layoffs will begin March 8 and will continue through May, according to a letter posted on the website of United Steelworkers union Local 1104, which represents workers at the Lorain plant.
“This action is a result of a decline in tubular market conditions, which is impacting demand for the plant’s products,” U.S. Steel wrote in a letter addressed to USW President Leo Gerard.
In a notice posted on the union website, Local 1104 President Tom McDermott said “what appeared just a few short weeks ago as being a productive year … has most abruptly turned sour.”
Oil fell below $50 a barrel Tuesday, driving prices to a five-year low. Growing stockpiles have prompted some producers to curb operations. Booming production of U.S. oil and gas has contributed to the oversupply.
U.S. Steel’s Lorain plant manufactures seamless pipe used in construction, and oil and gas exploration and production. The Houston plant processes pipe, tests it and provides other services.