By MARK REUTTER

Severstal, the embattled Russian owner of the Sparrows Point steel plant, has mailed a letter to employees denying that a final decision to shut the “L” blast furnace has been made, saying only that “different production scenarios are being considered.”

Last week, the Baltimore Sun reported that Thomas Russo, plant manager, told a Baltimore County official that the company would close its only blast furnace for an indeterminate period beginning in June. Russo made the same statement to a group of employees several weeks earlier, saying he believed the furnace would be idled in July rather than in June.

More than anything, the letter underscores the company’s concern that any premature announcement of a partial closure may cause customers to withdraw orders. Like other steel companies, Severstal has faced a sharp drop in production, which has aggravated its financial squeeze from overexpansion. Last week, the company announced the shutdown of its recently acquired Ohio River Valley mills, placing about 1,900 employees on long-term layoff.

If the Point’s furnace is idled, several hundred employees may be out of work over the summer. The plant is expected to continue production of tinplate and other products using stockpiled steel.

The letter to employees was signed by Russo and John Cirri, president of United Steelworkers Local 9477. But let there be no confusion – any decision to idle the Point will not be made locally, but 5,000 miles away at Severstal headquarters in Moscow.

Mark Reutter, a former Baltimore Sun reporter, wrote Making Steel: Sparrows Point (2004) and keeps tabs on the steel industry at makingsteel.com.

Related links:

* Dundalk Eagle:  Severstal spokeswoman says reports of planned shutdown are “premature.”  (5/14/09)

* The Times Leader (of Martin’s Ferry, Ohio):  Severstal announcement of shutdown of Ohio valley facilities. (5/7/09)