Domestic Production and Use
The iron and steel industry and ferrous foundries produced goods in 2008 that were valued at about $117 billion. Pig iron was produced by 8 companies operating integrated steel mills in about 18 locations. About 57 companies, producing raw steel at about 116 plants, had combined production capability of about 113 million tons. Indiana accounted for 25% of total raw steel production, followed by Ohio, 14%, Pennsylvania, 6%, and Michigan, 5%. The distribution of steel shipments was estimated to be: warehouses and steel service centers, 19%; construction, 16%; transportation (predominantly automotive), 13%; cans and containers, 3%; and other, 49%. About 564 iron foundries and 239 steel foundries operated in the United States in 2008.
Events, Trends and Issues
Soaring demand for steel products and ferrous raw materials in China and other countries caused record price increases and profits for steelmakers and raw material suppliers during 2008. The global economy, which may have entered a recession by the end of 2008 and which has been characterized by major problems in the commodity, credit, and financial sectors, adversely affected customers of steel used in construction, industrial equipment, and vehicles. Reduced consumption of steel led to rapidly declining steel prices, prompting steelmakers in Asia, Europe, and North America to slash output, delay mill-expansion plans, and furlough workers. Before the end of 2008, the world’s leading iron ore miners saw spot iron ore prices fall as global steel output declined. The world’s leading iron ore producer announced cuts in iron-ore pellet production in Brazil by 65%, while the world’s third-leading iron ore exporter also planned to cut production.
In addition, the coking coal market began to deteriorate before yearend 2008. The world’s largest steel producer by volume of production announced plans to reduce production in North America by 35% and in Europe by 30%, and to lay off indefinitely as many as 2,444 employees in its Burns Harbor, IN, plant. China’s steelmakers are expected to collectively decrease active production capacity by 20% in 2009. Globally, lower revenues and additional layoffs are forecast into 2009. A general economic recovery is not anticipated until at least the latter part of 2009. U.S. steel production and revenues are likely to decline in 2009.
Credit: U.S. Geological Survey, Mineral Commodity Summaries
Source: USGS website
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