U.S. Steel Canada is shutting down its Hamilton blast furnace indefinitely starting Monday, citing poor market conditions and slumping demand.

The Pittsburgh-based steel giant said the estimated 300 to 400 people affected will be shuffled to other parts of their steelmaking operations, including coke ovens and galvanizing lines.

The news has raised concerns that it’s another blow for the city’s once booming industry that gave it the moniker “steel town.”

Trevor Harris, a spokesperson for U.S. Steel Canada, formerly Stelco, said he didn’t know when operations would start up again. “I can’t speculate on when market conditions would improve enough to necessitate a restart,” he said.

Rolf Gerstenberger, president of the United Steelworkers Local 1005, raised concerns that Friday’s announcement has a familiar ring to it.

“In 2008 they did the same thing. They shut the blast furnace down on Oct. 26 and said they’re not laying anybody off, and then, three weeks later they started laying people off because you can only find so much busy work,” he said.

In addition, the company and unionized workers could be approaching a strike or lockout in the next month — something that has Gerstenberger questioning the timing of Friday’s announcement.

Talks have been going on since May, and, according the Gerstenberger, the company was supposed to be coming back to the table with a new proposal. But instead, last week, the company asked for a provincial conciliator — considered a last-ditch effort in negotiations.

Gerstenberger said he wouldn’t rule out the idea that the announcement is strategic. “They’ve got their official reason, they’re saying business is slow,” he said. “But they could do it to just pressure us, because they don’t want to negotiate.

“That’s what happens when you let foreign companies come in and take over,” he added, referring to the acquisition of Canadian company Stelco for more than $1 billion in 2007 by U.S. Steel. “It doesn’t matter what it means to the people in Hamilton or Canada.”

For their part, the steel magnate disagrees. “I think we’ve demonstrated a long-term commitment to the Canadian market,” said Harris, adding he cannot comment on current labour negotiations.

There’s also the task of actually shutting down a blast furnace, considered the heart of steel making. “The furnace is designed to run for 10 years without being cold idle,” said Gerstenberger, adding each time you shut down a blast furnace you risk permanent damage.

Harris said the company will be consulting with experts.

U.S. Steel is in the midst of a court battle with the federal government over promises it made under the Investment Canada Act when it acquired Stelco.

Ottawa says the company broke its production and employment undertakings when it idled most of its Canadian operations — which include the Hamilton plant and another facility in Nanticoke, Ont. — in early 2009.

The company doesn’t dispute that it broke two of the 31 promises it made. However, it said it was justified in doing so because the recession left it with no choice.

Christopher Bart, professor of strategy and governance at McMaster University, said U.S. Steel has been losing out to companies like Hamilton-based ArcelorMittal Dofasco in the last few years.

“It has been bad management and leadership that have brought them to this state,” he said.

With files from The Canadian Press and the Hamilton Spectator