Close on the heels of stopping production at its Cleveland plant in the US and laying off 700 workers last month, (See: ArcelorMittal to idle Cleveland plant; lay off 700 workers)  the world's biggest steel maker ArcelorMittal now plans to idle the Indiana plant and lay off about 400 workers as the demand for the metal plunges globally.

ArcelorMittal will be indefinitely idling steel bar operations at the Indiana Harbor Long Carbon facility in East Chicago, which will result in the steel maker laying off about  400 union and non-union employees, or 8 per cent of the Indiana Harbor plant's workforce.

The world's largest steel maker said that due to a global plunge in demand for steel, the company is forced to indefinitely idle its electric furnace and 12-inch bar mill at Indiana Harbor Long Carbon facility in East Chicago and layoff workers.

The company said in a statement that "This indefinite closure and corresponding layoffs reflect measures the company is being forced to take around the world to adapt to the market's situation."

The steel maker says it has informed the United Steel Workers union of its decision and the layoffs are expected to start in June.

The electric furnace and 12-inch bar mill that will be idled, makes structural steel used in buildings, bridges and railroad tracks. ArcelorMittal employs about 5,000 people at the Indiana Harbor plants.

The laid off workers affiliated to the union will receive supplemental unemployment benefits from the company for a limited period of time as well as government benefits.

In September, ArcelorMittal had averted a strike at its US plants and reached a four-year wage agreement with the United Steelworkers union representing 14,000 production, maintenance and clerical employees of the company. (See: ArcelorMittal averts strike at US plants; reaches agreement with USW)  

The Indiana Harbor facility is the largest steelmaking complex in North America with five blast furnaces to smelt molten iron from iron ore, and has total raw steelmaking capability of 10 million tons annually.

The facility consists of the former Inland Steel plant, founded in 1901, and another plant that was first known as Mark Manufacturing, founded in 1916 by Clayton Mark.  The facility has undergone several changes in ownership during its history.

The Luxemburg-based ArcelorMittal, employs over 15,000 hourly workers in the US, and had been forced to reduce steel production in North America by 40 per cent in November amid declining sales on account of weaker demand from major steel consuming industries such as automotive, construction, and retail appliances.

Steel prices have dropped over 70 per cent since their all time high this summer, and global steel producers have implemented production cuts to realign supply and demand that will help stabilise prices.

In February, the company reported its first ever loss of $2.6 billion in the last quarter as it wrote down the value of assets, inventories and raw-material contracts amid plunging demand for steel globally. (See: ArcelorMittal reports first ever loss of $2.63 billion)

Its net loss was $2.63 billion, compared with net income of $2.44 billion a year earlier, after taking one-off writedown charges of $ 4.4 billion, which also included $900 million related to job losses.