Table 1 indicates the decline of the basic open-hearth steelmaking process in favor of the basic oxygen process-both are the domain of the "integrated" steel companies. The rise of the electric arc furnace production illustrates the growth of the "minimills," small producers using only this process.
The tabulation of steel types shows the predominance of "plain carbon" steels and some decline in the production of alloy steels. This is caused by the development of the high-strength low-alloy steels in the 1960's. The alloy content of these steels is well below that of the recognized traditional alloy steels--always under one-quarter of 1%. For this reason, these steels, which took over some applications of alloy steels, are usually classified with the "plain carbon" grades.
The production of stainless steels and their higher alloyed cousins, heat-resisting grades, is growing slowly. These steels are always made in electric arc furnaces and are usually end- refined in argon-oxygen decarburization units.
Table 2 is the history of the U.S. steel industry in a nutshell. Shedding the excess capacity, mainly of older, less efficient units, resulted in better utilization of the remainder. Actually, this meant demolition of open-hearth furnaces, which were replaced by basic oxygen units but were kept as "spare capacity." For several years prior to 1975, capacity numbers were not published, and thus no capacity utilization data could be calculated.
Adoption of the continuous casting process, which replaced the time-honored ingot pouring followed by reheating and rolling the ingots, resulted in a sharp increase in process yield and decrease in worker-hours. Continuous casting produces a semifinished shape directly from liquid steel and bypasses the ingot and primary rolling stages. Since these two stages cause unavoidable steel losses, continuous casting increases yield, sometimes by as much as 12%. Process yield is the ratio of shipped steel weight to the weight of the ingot or cast semifinished section from which it originated.
Work productivity, expressed as hours worked per ton shipped, is actually a combination of better work organization and technological progress, such as adoption of basic oxygen furnaces and continuous casting. It is frequently--but not quite correctly--used as a measure of workers' productivity alone. The U.S. steel industry, with about 170,000 employees in 1990, turned out a similar amount of steel to that in the 1970's with more than one-half of a million, but it is the replacement of the obsolescent processes and installations that accounted for a large part of the reduction of personnel.
Another reason for halving the labor force needed to produce a ton of steel is the growth of minimills, which use the most labor-efficient processes and methods; some easy-to-make sections may use only 2 worker-hours per steel ton.
Table 3 indicates the general extent of the steel trade. At times of strong steel demand worldwide, such as in the years 1973-76 and 1979-80, imports are moderate because exporters ship to countries other than the United States and exports are fairly high. Both are, however, strongly influenced by the exchange value of the dollar: a strong, high-valued dollar promotes imports by making them cheaper and reduces export; this was the situation in 1983-87, although a weak dollar and strong sales efforts by the steel producers resulted in high exports in 1989- 90.
Because of the dramatic increase of imports in 1984, the U.S. Government negotiated a number of treaties, Voluntary Restraint Agreements (VRA's), with exporters to restrict imports and thus help the U.S. steel industry. The effectiveness of the VRA's from 1985 onward is quite apparent.
The apparent consumption reported here is not corrected for inventory changes: reduced inventories may indicate increased demand and vice versa. What is regarded as an "inventory" by one person may be "safety stock" for another and "stock earmarked for expected future orders" by a third. Hence, comparisons of such uncertain numbers, which may vary as a function of general business climate, may be misleading. The American Iron and Steel Institute and many other institutions use the "uncorrected" number, and this was used in table 3.
Typically, "stocks" at steel mills are about 8 to 15 million metric tons or 1 to 2 months' demand; at the warehouses and service centers, "stocks" are about 5 to 7 million or 3 to 4 months' demand. User inventories may vary from 10 to 20 million metric tons. As aforementioned, these numbers are based on subjective definitions of "stocks." User inventories tend to go up ahead of expected price increases or in times of strong demand; thus, the increase may actually mask increased consumption.
The intensity of steel consumption as expressed in pounds per person dropped from 1,000-plus pounds in the early 1970's to less than 800 pounds in the late 1980's. About 50 pounds may be accounted for by the down-sizing of automobiles; the remainder is probably caused mainly by the reduction of the steel content of roads and buildings and almost complete replacement of steel cans with aluminum ones. Wide adoption of high-strength low-alloy steels also reduced the amounts of steel used in many applications.
- Table 1.--Salient statistics of U.S. production and shipments of steel
- Table 2.--U.S. raw steel production, by furnace process and by steel type
- Table 3.--Shipments, exports, imports, and consumption of steel mill domestic products