SunCoke companies expect U.S. Steel to honor coke purchasing deal

SunCoke Energy Inc. (NYSE: SXC) and SunCoke Energy Partners LP (NYSE: SXCP) on Nov. 23 responded to a United States Steel Corp. announcement that day that it intends to temporarily idle its blast furnace and related steelmaking operations in Granite City, Ill.

“SunCoke has a longstanding relationship with U.S. Steel and we expect they will honor our take-or-pay contract to supply coke to their blast furnace operations through 2025,” the companies said. “We are committed to working with U.S. Steel during this temporary idling.”

United States Steel (NYSE: X) announced that it will temporarily idle its Granite City Works steelmaking and finishing operations in Granite City. As the primary flat-roll supplier of the oil and gas industry, the idling is part of an on-going adjustment of steelmaking operations throughout North America to match customer demand. 

U.S. Steel noted that it routinely adjusts production at its operating facilities to reflect market fluctuations. This is a result of continued challenging global market conditions including fluctuating oil prices, reduced rig counts and associated inventory overhang, depressed steel prices and unfairly traded imports, which continue to have a significant impact on the business, it added. The company said it will continue to operate its steelmaking operations in Indiana, Michigan and Pennsylvania, as well some finishing operations in Alabama. 

Granite City Works employees were issued notices under the Worker Adjustment and Retraining Notification (WARN) Act on Oct. 8.

SunCoke Energy Inc. supplies high-quality coke, which is a baked form of metallurgical coal, to the integrated steel industry under long-term, take-or-pay contracts that pass through commodity and certain operating costs to customers. It is the sponsor of SunCoke Energy Partners, a publicly traded master limited partnership, holding a 2% general partner interest, 54% limited partnership interest and all of the incentive distribution rights. Its cokemaking facilities are located in Illinois, Indiana, Ohio, Virginia, Brazil and India. That includes a coke plant located at U.S. Steel’s Granite City facility.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.