The Orion Steel Union Pacific lawsuit was a breach-of-contract case Union Pacific Railroad filed in November 2025 against Rocky Mountain Steel Mills, the Pueblo, Colorado, facility owned by Orion Steel Companies, after the mill halted rail shipments and demanded a 61 percent price increase over existing contract terms. The two sides resolved the dispute on April 15, 2026, when they announced a new seven-year supply contract and Union Pacific withdrew its complaint.1Union Pacific. Union Pacific Railroad and Rocky Mountain Steel Mills Announce New Contract
What Triggered the Dispute
Atlas Holdings closed its acquisition of Evraz’s North American operations on July 31, 2025, rebranded the business as Orion Steel Companies, and renamed the Pueblo facility Rocky Mountain Steel Mills.2PE Professional. Atlas Completes Acquisition of Evraz North America, Forms Orion Steel, Appoints Doug Matthews CEO According to Union Pacific’s later complaint, the pressure began almost immediately. Four days after closing, Orion Steel executives allegedly demanded a 61 percent price increase over the existing long-term contract and threatened to force the prior owner into bankruptcy if Union Pacific refused.3Trains. Colorado Steel Mill Halts Rail Shipments to BNSF and UP
When the railroad did not agree, Rocky Mountain Steel stopped shipping rail to Union Pacific in September 2025. The mill described the requested adjustment as “years-overdue” and necessary to keep the Pueblo facility viable, urging railroads to “reject cheap imported steel and ensure the viability of domestic steel production by paying market prices.”3Trains. Colorado Steel Mill Halts Rail Shipments to BNSF and UP
What Union Pacific Alleged in Court
Union Pacific filed suit on November 25, 2025, in the District Court of Douglas County, Nebraska. The complaint alleged that Rocky Mountain Steel breached long-term supply agreements by withholding rail unless the railroad accepted the 61 percent price hike. It also alleged that the steelmaker missed production milestones tied to a $500 million new rail production facility that had been part of the parties’ longer-term plans.3Trains. Colorado Steel Mill Halts Rail Shipments to BNSF and UP
Union Pacific said the shipment halt forced it to scramble for alternative sourcing and produced “significant financial and operational implications,” including disruptions to its track renewal and rail installation schedules and the rescheduling or shutdown of installation crews. Rocky Mountain Steel called the lawsuit “wholly without legal merit.”4Pueblo Star Journal. Steel Mill Sale Agreement Legal Dispute
How the Settlement Resolved It
On April 15, 2026, Union Pacific and Rocky Mountain Steel announced a new seven-year contract for the domestic production of steel rails, and Union Pacific withdrew its Nebraska lawsuit, ending all pending legal disputes between the two companies.1Union Pacific. Union Pacific Railroad and Rocky Mountain Steel Mills Announce New Contract Financial terms were not disclosed, and Union Pacific declined to comment on the contract’s value.5Manufacturing Dive. Union Pacific Settles Dispute With Rail Supplier, Reaches Seven-Year Agreement
Under the deal, Union Pacific committed to buying the majority of its rail from a U.S. manufacturer. Rocky Mountain Steel’s new long rail mill, part of a $1 billion-plus investment at the Pueblo site, is expected to begin operations in 2026 and will produce 100-meter (328-foot) premium rails that require 80 percent fewer welds than standard 80-foot rails. The facility runs on power from an 1,800-acre solar farm the company describes as making it the world’s largest solar-powered steel mill.6Union Pacific. Rocky Mountain Steel Mills Contract
The United Steelworkers union, which represents the Pueblo workforce, backed the deal. USW International President Roxanne Brown said members “have proudly produced steel rail for Union Pacific for generations.” U.S. Senator Michael Bennet of Colorado said the agreement “will provide long-term certainty and stability for Pueblo steelworkers, the local economy, and domestic rail production.”7Trains. UP and Rail Producer Settle Dispute, Sign New Long-Term Contract
Why Union Pacific Had Few Alternatives
The market position of the Pueblo mill shaped the outcome. Cleveland-Cliffs idled its rail-producing plant in Steelton, Pennsylvania, in the summer of 2025 and announced in October that it would permanently close the facility on January 13, 2026, citing “weak demand and insufficient pricing.”8ABC27. Cleveland-Cliffs Steelton Plant to Permanently Close Early 2026 That left only two U.S. mills capable of producing rail: Rocky Mountain Steel in Pueblo and Steel Dynamics in Columbia City, Indiana. The Steel Dynamics mill flexes between structural steel and rail depending on demand and had historically produced only limited rail volumes,9AIST. Steel Dynamics to Expand Structural Capacity With New Caster at Columbia City making Pueblo the effective sole dedicated rail supplier for the country’s freight railroads.10Trains. Rail-Making Steelton, PA Plant to Be Closed Permanently
Imports were not a workable substitute either. Section 232 tariffs on imported steel stood at 25 percent by February 2025 and doubled to 50 percent in June 2025.11Council on Foreign Relations. Guide to Trumps Section 232 Tariffs More than 30 antidumping and countervailing duty orders on steel-related products remained in force, and rail from producers in Japan and China carried lead times too long for urgent maintenance needs.3Trains. Colorado Steel Mill Halts Rail Shipments to BNSF and UP Union Pacific’s operational alarm in its complaint reflected those constraints.
Where the BNSF Case Stands
Union Pacific was not the only railroad in this fight. BNSF Railway had sued Rocky Mountain Steel earlier, on November 12, 2025, in the Business Court of Texas, alleging breach of a May 1, 2024, supply contract under which BNSF agreed to buy at least 80 percent of its rail from the Pueblo mill, with annual orders exceeding $50 million. Rocky Mountain Steel had told BNSF in September 2025 that it would no longer sell rail at the contract price and sought an increase of more than 50 percent; when BNSF refused, the mill stopped shipping in October 2025, leaving August and September orders unfulfilled.12CPR News. Pueblo Steel Mill BNSF Lawsuit
As of April 2026, the BNSF lawsuit remained unresolved. No settlement, new contract, or withdrawal of the case had been publicly reported.13Pueblo Star Journal. New Rail Contract Signals Stability for Pueblo Steel Mill After Months of Uncertainty BNSF relies on the Pueblo mill for more than 100,000 tons of rail annually,4Pueblo Star Journal. Steel Mill Sale Agreement Legal Dispute and the same supply constraints that pushed Union Pacific toward settlement apply to it as well.