Steel industry history in the United States
The steel industry in the United States dates back more than 200 years to the dawn of the industrial revolution. Today's steel industry in the U.S. was formed largely by economic circumstances both domestic and international since 1975.
A look back at recent steel industry events and trends in the United States:
The long decline (1975 - 2000)
- U.S. and global demand was flat due to end of postwar, European boom; slow growth in third world countries and post-89 collapse in the Commonwealth of Independent States (CIS)
- New entrants and steady growth in North American Free Trade Agreement (NAFTA) mini-mill sector took market share from integrated producers
- Excess staffing and high fixed costs
- Value destruction and weakening balance sheets for NAFTA integrated producers
- Imports reached a record high in 1998 as Asian financial crisis attracted additional imports to the U.S. market; prices and production deteriorated, setting the stage for the domestic steel crisis that resulted in the bankruptcy crisis
The bankruptcy crisis (2001 - 2002)
- Businesses were managed for cash in weak markets putting stress on operating maintenance and capital investments
- Cascading bankruptcies (13 of 17 North American integrated flat-rolled producers affected)
Restructuring and recovery (2003 - 2004)
- Emergence of new players with different business models and union relationships
- Shedding of legacy costs and restructuring of balance sheets
- Significant turnover in leadership and management
- China boom and surge in commodity markets
- Strong profit recovery in 2004
Stabilization (2005 - 2007)
- Recurrent challenges of inventory-driven booms and busts, but adjustments were made relatively quickly
- Improved financial returns for North American steel producers
Global financial crisis (2008 - 2011)
- Global financial crisis hit in third quarter 2008, placing significant strain on the domestic steel industry with capacity utilization rates hitting a record low of 33.5 percent in the last week of 2008
- Record low production levels in 2009 resulted in significant layoffs by integrated steel producers
- 2010 gave way to a slow and progressive recovery, though capacity utilization continued to hover around 70 percent
- Measured improvement in 2011, with capacity utilization around 75 percent; the 2003-2004 restructuring better positioned the industry to sustain the 2008 crisis
Slow and cautious recovery (2012 - present)
- Most major markets saw demand increase in 2012, with a notable 8 percent increase in the U.S. and the broader North American market supported by strength in the manufacturing sector – specifically autos, energy and heavy equipment.
- In 2013, the market for steel in the U.S. was relatively flat, with overall demand just slightly down, tied to service center inventory reductions.
- In 2014, the steel market saw a 14 percent increase in apparent demand but domestic shipments only grew by 3 percent as imports captured most of the growth. The strong U.S. dollar resulted in a surge of flat roll imports and an inventory overbuild, impacting domestic order books and causing prices to weaken.
- In 2015, raw steel production decreased 5 percent and total shipments decreased 12 percent in the U.S. The economic conditions apparent in 2014 continued throughout 2015 causing the price of steel to fall considerably throughout the year.
- In 2016, U.S. apparent demand for steel fell 5 percent; however, domestic shipments remained relatively flat. Record levels of auto production and construction-related growth were unable to offset the large downturn in the energy market and the continuation of a service center destocking cycle. Imports receded from peak levels in 2014 and 2015 as domestic producers benefited from successful trade case rulings. Prices were able to make a rebound.
- Industry experts anticipate modest growth in demand in the domestic steel industry in 2017, largely due to the momentum in the construction and auto industries, restocking by service centers, and the re-emergence of activity in the energy market. Even with this expected increase, the industry expects import share to remain elevated from historic levels. Now, more than ever, domestic steel producers must focus on productivity to make our products cost effective and sustainable.