STEEL INDUSTRY

Steel Industry

ABSTRACT

This is a term paper, which investigates the steel industries of the United States. The focus is on researching the history, present and future of steel industries of United States. The U.S. steel industry has undergone dramatic changes during the last twenty years. The emergence of creative competition undermined the ability of the dominant oligopolistic corporations to insulate their price structure from the volatility of demand. The new uncertainties in the market-place call into question the feasibility of the mass production technology. This situation is compounded by stagnation in demand for steel. The paper is discussing trends in the steel industry and how it may impact US economy. Finally, I conclude the paper by providing suggestion How to get the best future of steel industries which will impact the U.S. economy.

Steel Industry

Introduction

United States in the 1940s, the American steel industry, produced 89 million tons of steel this was more than ten times the output the other industry could produce at that time. The United States in the 1940s produced and controlled 52 percent steel production. By the 1970s, the United States were producing 115 million tons of steel on a yearly basis. The United States was importing 20 percent of steel from abroad for its domestic use. In the 1970s, the United States was importing steel from about thirty different countries, and the single largest supplier was Japan with a total of about 40 percent of all United States imports. Steel imports increased into the United States increased from one percent of domestic consumption to 14 percent in 1976 and to 22 percent by 1982. The main reasons for the decline of the American steel mill production decline were a lack of reinvestment in their steel plants, and a lack of modernization and small-scale steel plants.

Trends in the steel industry and, how it may impact US economy

The U.S. steel industry has undergone dramatic changes during the last twenty years. The emergence of creative competition undermined the ability of the dominant oligopolistic corporations to insulate their price structure from the volatility of demand. The new uncertainties in the market-place call into question the feasibility of the mass production technology. This situation is compounded by stagnation in demand for steel. The benefits of increasing economies-of-scale are outweighed by the risks associated with the huge capital outlays required for their achievement.

For these reasons, the mini-mills seem to represent a viable alternative to integrated steel making. However, the success of the mini-mills cannot be measured solely by their own financial data. If the mini-mills warrant a reconsideration of government policies for the steel industry, as many observers have claimed, then a macro-economic assessment of mini-mill performance is required. Do mini-mills increase overall demand for steel? Do mini-mills improve the international competitiveness of U.S. steelmaking? Do mini-mills contribute to aggregate demand?

Increases in steel demand can be achieved either through lower prices or the development of new products. Historically, the price elasticity of steel demand has been thought to be rather low (MacPhee, ...