U.S. steel industry shows signs of a turnaround

Brian Bull Oct 12, 2011

U.S. steel industry shows signs of a turnaround

Brian Bull Oct 12, 2011

Steve Chiotakis: The World Steel Association’s annual conference kicks off today in Paris. Overall, production and prices have dropped because of a slowdown in global production. But the American steel industry is showing signs of a turnaround.

From station WCPN in Cleveland, Brian Bull reports.

Brian Bull: Ernie Sexton is the site manager at TMK IPSCO‘s steel plant near Youngstown, Ohio. He watches as stacks of steel pipe are loaded onto a giant lathe for finishing.

Ernie Sexton: Then we feed it into our equipment. That’s when we do the metal removal and threading of the product.

These pipes are headed to the growing natural gas industry in the Marcellus Shale region in Ohio, Pennsylvania, West Virginia and New York. The heavy-grade pipes will be used to drill wells as deep as five miles underground. Sexton says if it weren’t for such operations, his plant wouldn’t even be here.

Sexton: We’re a relatively new facility; we just opened in March 2010. So this is all new to us.

Nancy Gravatt is with the American Iron and Steel Institute. While the U.S. steel industry is still behind where it was prior to the recession, she expects shipments of American steel to rise 7 percent this year over last. Natural gas operations account for most of the gain.

Nancy Gravatt: So we expect, and I think analysts predict for the next 10 years, to see continuing demand from the energy sector.

Another industry boosting U.S. steel is automotive. Around-the-clock-shifts have resumed at Republic Steel, a 125-year-old company in Canton, Ohio. Here in a dusty railyard, a crane dumps heaps of scrap metal into a towering clamshell bucket. It’ll be melted down into ingots, and sold to car companies.

Mark Huemme is Republic’s marketing director.

Mark Huemme: Well we’ve seen a rather dramatic uptick starting with early 2010. Most of our business is driven by light vehicle sales and by heavy vehicle sales.

Industry reps in the Northeast aren’t worried yet about cheaper Chinese steel cutting in. The plants and mills here are practically next door to the natural gas and automotive sites they sell to. And that keeps costs down.

In Cleveland, I’m Brian Bull for Marketplace.

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