Economy
Letter to the Editor: Writer Sees Paradox in Steelmakers’ Stance
Written by Tim Triplett
August 9, 2017
Steel Market Update received the following letter to the editor which was in response to comments made in a recent article by an un-named steel mill executive:
I read your report “U.S. Steelmakers: We’re Not Protectionist” with interest, but also with a little bit of a smile. Since the mid-1960s, the U.S. steel industry has gone to Washington for help against imports. Several quota systems, voluntary restraint agreements, trigger price mechanisms and other measures have been negotiated to protect the U.S. steel industry and allow them to restructure to be able to better compete. And after all that, we’re still importing almost 25 percent of the steel needed in this country as semi-finished products such as slabs and billets. On top of that, they are coming from the same countries the U.S. steel industry accuses of illegally subsidizing.
The “executive from a major steel mill” quoted in the article noted that “we have the raw materials, we have the infrastructure, we have the talent, we have a mature industry” [to compete on a level playing field]. I don’t want to argue about the raw materials (although we import them) or the talent (although the engineering classes in our colleges and universities are over 90 percent foreigners), but I have my doubts regarding the infrastructure. Freight rates in the U.S. are extremely high. For customers in the Gulf and on the West Coast, the freight cost from the nearest domestic supplier is often higher than the ocean freight from Korea or Turkey.
In the 1950s and 1960s, the U.S. steel industry was second to none in the world. We had the best steelmaking facilities, the best rolling mills and there wasn’t a steel product that was not made right here in the USA. Look where we are now: We no longer have the best and most modern steelmaking facilities. Rolling mills are mostly imported, and some products are only produced by one mill. According to a report in SMU, there is a shortage of electrodes used in EAF mills. Although basically all new steel production in the USA has been in EAF, the majority of the electrodes are produced overseas. Why not in the U.S.?
–Anonymous SMU Reader
Editor’s note: Have a strong opinion about something you’ve read in Steel Market Update? We welcome and encourage letters to the editor and the free exchange of ideas. We prefer that letters be signed, but will publish comments anonymously in the event expressing an unpopular opinion might have repercussions for the author. Just email your views to John@SteelMarketUpdate.com.
Tim Triplett
Read more from Tim TriplettLatest in Economy
Metalformers expect steady conditions in coming months
Metalformers expect economic activity to stabilize over the next three months, according to the recently released July Business Conditions Report from the Precision Metalforming Association (PMA).
Architecture Billings Index rises from 4-year low in June
The Architecture Billings Index (ABI) ticked up in June following May’s four-year low, according to the American Institute of Architects (AIA) and Deltek. While the index improved this month, it continues to indicate weak business conditions among architecture firms.
Beige Book: Uncertainty to continue fueling slower economic growth
Growth in the US economy continues to be constrained. The Federal Reserve’s Beige Book report for July shows more areas reporting flat or declining economic activity than in its previous report at the end of May.
AISI, AISC, University of Massachusetts get ~$6.4M EPA grant
The American Iron and Steel Institute (AISI), American Institute of Steel Construction (AISC), and the University of Massachusetts at Amherst have received a grant to enhance emissions reporting for steel construction projects.
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in July, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.