About the Industry
Faced with international competition, the U.S. steel industry continues to respond by modernizing its manufacturing processes and consolidating businesses to increase productivity. Despite successful efforts to reduce costs and an improving competitive position, steel manufacturing firms still face stiff competition. Investment in modern equipment and worker training has transformed the U.S. steel industry from one of the Nation's most moribund to one of the world's leaders in worker productivity and the lowest cost producer for some types of steel. Over the past 25-30 years, steel producers have, in some cases, reduced the number of man-hours required to produce a ton of steel by ninety percent.
Establishments in this industry produce steel by melting iron ore, scrap metal, and other additives in furnaces. The molten metal output is then solidified into semifinished shapes before it is rolled, drawn, cast, and extruded to make sheet, rod, bar, tubing, and wire. Other establishments in the industry make finished steel products directly from purchased steel.
The least costly method of making steel uses scrap metal as its base. Steel scrap from many sources—such as old bridges, refrigerators, and automobiles—and other additives are placed in an electric arc furnace, where the intense heat produced by carbon electrodes and chemical reactions melts the scrap, converting it into molten steel. Establishments that use this method of producing steel are called electric arc furnace (EAF) mills, or minimills. While EAFs are sometimes small, some are large enough to produce 400 tons of steel at a time. The growth of EAFs has been driven by the technology's smaller initial capital investment and lower operating costs. Moreover, scrap metal is found in all parts of the country, so EAFs are not tied as closely to raw material deposits as are integrated mills and can be placed closer to consumers. EAFs now account for over half of American steel production and their share is expected to continue to grow in coming years.
The growth of EAFs comes partly at the expense of integrated mills. Integrated mills reduce iron ore to molten pig iron in blast furnaces. The iron is then sent to the oxygen furnace, where it is combined with scrap to make molten steel. The steel produced by integrated mills generally is considered to be of higher quality than steel from EAFs but, because the production process is more complicated and consumes more energy, it is more costly.
During the final phase of the steel manufacturing process, semi-finished steel from either EAFs or integrated mills is converted into finished products. Some of the goods produced in finishing mills are steel wire, pipe, bars, rods, and sheets. Products also may be coated with chemicals, paints, or other metals that give the steel desired characteristics for various industries and consumers. Also involved in steel manufacturing are firms that produce alloys by adding materials such as silicon and manganese to the steel. Varying the amounts of carbon and other elements contained in the final product can yield thousands of different types of steel, each with specific properties suited for a particular use.
Steel mills employ sophisticated technology. Taking several forms, this technology has improved both product quality and worker productivity. Computers are essential to most technological advances in steel production, from production scheduling and machine control to metallurgical analysis. Computerized systems change the nature of many jobs, while they eliminate or reduce the numbers of others.
For workers, modernization of integrated and EAF steel mills often has meant learning new skills to operate sophisticated equipment. Competition also has resulted in increasing specialization of steel production, as various producers attempt to capture different niches in the market. With these changes has come a growing emphasis on flexibility and adaptability for both workers and production technology. As strong international and domestic competition continue for U.S. steel producers, the nature of the industry and the jobs of its workers are expected to continue to change.