SIC 3312 Steel Works, Blast Furnaces (Including Coke Ovens), and Rolling Mills
SIC 3312
This classification includes establishments primarily engaged in manufacturing hot metal, pig iron, and silvery pig iron from iron ore and iron and steel scrap; converting pig iron, scrap iron, and scrap steel into steel; and in hot-rolling iron and steel into basic shapes, such as plates, sheets, strips, rods, bars, and tubing. Merchant blast furnaces and by-product or beehive coke ovens are also included in this industry. Establishments primarily engaged in manufacturing ferrous and nonferrous additive alloys by electrometallurgical processes are classified in SIC 3313: Electrometallurgical Products, Except Steel.
324199
All Other Petroleum and Coal Products Manufacturing
331111
Iron and Steel Mills
The first steel mill in North America was built in the 1600s, making the industry one of the oldest in the country. During much of the twentieth century, the steel industry served as the measure of the U.S. economy. In 2001, U.S. steel companies employed about 127,359 people and shipped more than 88 million metric tons of steel. Despite its impressive size, the steel industry began declining in the mid-1970s and suffered a devastating depression between 1982 and 1986. After peaking in 1978 at over 137 million tons, U.S. steel production slipped to less than 90 million tons in 1991. Anemic market growth, expensive labor, increased production costs, and stagnant prices pummeled many manufacturers in the industry. In addition, the proliferation of foreign competition and the popularity of substitute materials, such as plastics and aluminum, gouged industry profits.
In response to a more competitive environment, the U.S. steel industry continued to restructure itself in the late 1980s and early 1990s. By 1993, new production techniques and facilities, as well as increased automation, had made U.S. steelmakers among the most productive in the world. From the low point in 1991, U.S. steelmakers steadily increased production during the 1990s, reaching peak levels in 1997 of 108.6 million tons produced and 105.9 million tons shipped. As productivity in the steel industry increased, the labor force declined to about 159,000 jobs in 1998, down from 171,000 in 1996.
Domestic steel production accounted for more than 12 percent of total world production annually from 1993 to 1998, reversing a downward trend from 26 percent in 1960 to less than 11 percent in 1991. Although U.S. steelmakers enjoyed strong domestic demand for steel in 1997 and 1998, especially from the automotive, construction, and industrial machinery and equipment production markets, they faced increasing competition from foreign steelmakers. There were record levels of imported steel in 1998, with U.S. steelmakers uniting to charge foreign producers with dumping steel into the U.S. market at below-market cost.
Despite the industry's successful reversal of its fortunes in the mid-1990s, the tides had turned again in the last years of the 1990s and the first years of the 2000s. Value of products shipped declined steadily, from nearly $57.0 billion in 1997 to $52.1 billion in 2000. Then the bottom fell out, and in 2001, total value of products shipped fell to just $44.1 billion, causing dozens of companies to file for bankruptcy. Import tariffs, imposed by the Bush Administration, along with consolidation within the industry led to a slight reprieve for the industry during 2002. However, serious questions remain regarding the long-term health of the steel industry in the United States.
According to the U.S. Census Bureau there were 373 iron and steel mills in 2002, employing 118,847 workers and 93,182 workers in production. Total industry shipments were valued at $47.1 billion. By 2004, the overall industry had numbered approximately 2,657 establishments primarily engaged in manufacturing hot metal, pig iron, and silvery pig iron from iron ore and iron and steel scrap; converting pig iron, scrap iron, and scrap steel; and in hot-rolling iron and steel into basic shapes. Together, they employed some 154,484 workers and generated about $66.1 billion in annual sales. States with the majority of foundries included California, Michigan, Ohio, Pennsylvania, and Texas.
Blast furnaces and steel mills represented the largest sector in this industry, with 21.2 percent of the market. Combined tool and die steel, including steel alloys represented 23.1 percent. Stainless steel and steel structural shapes and pilings both stood at 6.9 percent, respectively.
Restructuring within the U.S. steel industry in order to retain their market share from lower-priced imports flooding the market had proven profitable in 2004 and carried over into 2005, when the industry had been faced with the high cost of raw materials, such as scrap that forced surcharges to be added to their shipments.
Steel companies are involved in the manufacture of hot metal, pig iron, and silvery pig iron from iron ore, iron, and steel scrap. They are also involved in converting pig iron, scrap iron, and scrap steel into steel, as well as hot-rolling iron and steel into plates, sheets, strips, and bars. These end products are purchased by companies in other industries, which usually shape and manipulate the steel to create finished products.
Products offered by steelmakers are classified into five categories according to the manner in which they were processed and their chemical compositions. Carbon steels are used mostly for flat rolled products because of their high malleability. Machines, auto bodies, ships, and building structures are made with this type of steel. In fact, carbon steels accounted for about 54 percent of all U.S. steel production in the 1990s. Alloy steels, which made up about 10 percent of the market, integrate elements into steel to enhance its physical properties. Corrosion resistance, greater strength, and increased conductivity are a few of the advantages offered by some alloys.
In comparison to carbon and alloy steels, stainless steels are highly resistant to rust and may be stronger or offer resistance to temperature changes. Accounting for 4.7 percent of the steel market volume, stainless steel is often used in pipes, tanks, and in the medical field. Tool steels and high-strength low alloy (HSLA) steels accounted for less than 1 percent of industry production, combined. They are used in applications in which strength and weight are critical.
Steel manufacturers can be divided into two camps—traditional integrated mills and non-integrated "minimills." Integrated steel mills undertake every step of the steel-making process. These facilities typically begin by converting mixtures of iron ore, limestone, and coke (made from coal) into molten iron using a blast furnace. Basic oxygen furnaces (BOFs) are next used to convert the molten iron into steel, which is then cast into ingots. Ingots are then shaped into slabs, billets, or blooms of steel.
Increasing numbers of integrated mills in the 1990s were using a process called continuous casting to bypass the production of ingots and cast billets, slabs, and blooms directly from molten iron. Compared to the old ingot teeming process, continuous casting is less complicated and yields a superior product. In this process, molten steel from a furnace is quickly carried in a ladle directly to a refractory lined container, or tundish, at the top of the caster. The molten metal is then poured into the tundish, which feeds it continuously into the caster, the core of which is a water-cooled mold open at both ends. When molten steel enters one end of the mold and cools, a "skin" of metal forms around a liquid core. The material leaves the other end of the machine and is further cooled by water sprays, solidifying the metal. Continuous casting cuts time, consume less energy, and increases yield. It has been estimated that it cuts operating costs by about $30 a ton. Steelmakers next convert the finished, or semi-finished, steel into rolls, plates, bars, tubes, rails, or other more marketable products, especially for the auto industry, at a rolling mill. By 1995, every major U.S. manufacturer relied on continuous casting.
In the 1990s, minimills, or non-integrated facilities, were using the same process as integrated mills with a few exceptions. Rather than process base materials—iron ore, coke, and limestone—minimills typically start with scrap iron or steel. The scrap, melted in an electric arc furnace (EAF), rather than a blast or basic oxygen furnace, is continuously cast into blooms and billets. Minimills typically produced fewer finished products than integrated mills. Although many manufacturers were broadening their offerings to include steel pipes, plates, and sheets, most minimills emphasized rods and bars used in light construction.
Minimills are capable of producing from 150,000 to 2 million tons of steel per year. In contrast, most integrated mills can generate 2 to 4 million tons per year. Minimills are also typically able to produce steel at a much lower cost than their larger cousins. Because minimills do not have to be located near supplies of raw ingredients, for instance, they are able to operate closer to their customers, thus reducing product transport costs. In addition, more minimills are located in the southern United States and benefit from less expensive, non-union labor. Integrated mills, on the other hand, employ union labor. Union contracts prevent integrated companies from reducing compensation costs when...
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