Steel
Manufacturing
 Industry
Overview
Steel is one of the basic building blocks of the modern world.
Automobiles, appliances, bridges, oil pipelines, and buildings, all are
made with steel. While steel manufacturing has existed for centuries,
the process for making steel continues to evolve.
Establishments in this
industry produce steel by melting iron ore, scrap metal, and other
additives in furnaces. The molten metal output is then solidified into
semifinished shapes before it is rolled, drawn, cast, and extruded to
make sheet, rod, bar, tubing, beams, and wire. Other establishments in
the industry make finished steel products directly from purchased steel.
The
least costly method of making steel uses scrap metal as its base. Steel
scrap from many sources—such as old bridges, household appliances, and
automobiles—and other additives are placed in an electric arc furnace,
where the intense heat produced by carbon electrodes and chemical
reactions melts the scrap, converting it into molten steel.
Establishments that use this method of producing steel are called
electric arc furnace (EAF) mills, or minimills. While EAFs are sometimes
small, some are large enough to produce 400 tons of steel at a time. The
growth of EAFs has been driven by the technology's smaller initial
capital investment and lower operating costs. Moreover, scrap metal is
found in all parts of the country, so EAFs are not tied as closely to
raw material deposits as are integrated mills and thus can be placed
closer to customers. EAFs now account for well over half of American
steel production and their share is expected to continue to grow in
coming years as they move to produce more higher end products by adding
virgin iron ore to the mix of steel scrap and other additives.
The growth of EAFs
comes partly at the expense of integrated mills. Integrated mills reduce
iron ore to molten pig iron in blast furnaces. The iron is then sent to
an oxygen furnace, where it is combined with scrap to make molten steel.
The steel produced by integrated mills generally is considered to be of
higher quality than steel from EAFs. The higher quality production
process is more complicated and consumes more energy, making it more
costly.
Industry
Organization
The
steel industry consists of EAFs and integrated mills that produce iron
and steel from scrap or iron ore. Most of these mills also have
finishing mills on site that convert iron and steel into both finished
and unfinished products. Some of the goods produced in finishing mills
are steel wire, pipe, bars, rods, and sheets. In these finishing mills,
products also may be coated with chemicals, paints, or other metals that
give the steel desired characteristics for various industries and
consumers.
While wire, steel
reinforcing bars, and pipes are considered finished products, rolled
steel is unfinished, meaning it is normally shipped to companies, such
as automotive plants, that stamp, shape, and machine the rolled steel
into car parts. Finished products also are manufactured by other
companies in this industry that make pipe and tubing, plate, strip, rod,
bar, and wire from purchased steel. Competition from all these mills has
resulted in increasing specialization of steel production, as various
mills attempt to capture different niches in the market.
Also included in the
steel manufacturing industry are firms that produce alloys by adding
materials such as silicon and manganese to the steel. Varying the
amounts of carbon and other elements contained in the final product can
yield thousands of different types of steel, each with specific
properties suited for a particular use.
Recent
Developments
Steel
manufacturing is an intensely competitive global industry. By
continually improving its manufacturing processes and consolidating
businesses, the U.S. steel industry has increased productivity
sufficiently to remain competitive in the global market for steel.
Investment in modern equipment and worker training transformed the
industry. Over the past 25-30 years, steel producers have, in some
cases, reduced the number of work-hours required to produce a ton of
steel by 90 percent.
To achieve these
productivity improvements as well as product improvements, steel mills
employ some of the most sophisticated technology available. Computers
have been essential to many of these advancements, from production
scheduling and machine control to metallurgical analysis. For workers,
modernization of integrated, EAF, and finishing mills often has meant
learning new skills to operate sophisticated equipment.
As countries around
the world attempt to reduce emissions and produce cleaner energy, the
need for structural steel will increase. Steel will be needed for
support towers as well as reinforcing rebar toward the construction of
new power generation facilities. In addition, the transmission
infrastructure needed to transport electricity also will result in
greater demand for steel. The expansion of clean energy production is
expected to result in demand for many types of steel products.
Working
Environment
The
expense of plant and machinery and significant production startup costs
force most mills to operate around the clock, 7 days a week.
Nonsupervisory production workers averaged 43.8 hours per week in 2008
in iron and steel mills and 41.3 hours in steel product manufacturing;
only 2 percent of workers are employed part time. Workers usually work
varying shifts, switching between working days one week and nights the
next. Some mills operate two 12-hour shifts, while others operate three
8-hour shifts. Overtime work during peak production periods is common.
Steel mills evoke images of strenuous, hot, and potentially dangerous
work. While many dangerous and difficult jobs remain in the steel
industry, modern equipment and facilities have helped to change this.
The most strenuous tasks were among the first to be automated. For
example, computer-controlled machinery helps to monitor and move iron
and steel through the production processes, reducing the need for heavy
labor. Many key tasks are now performed by machines that are controlled
by workers sitting in air-conditioned pulpits supervising the production
process through windows and by monitoring banks of computer screens.
Nevertheless, large machinery and molten metal can be hazardous unless
safety procedures are observed. Hardhats, safety shoes, protective
glasses, earplugs, and protective clothing are required in most
production areas.
Employment
The
steel industry provided about 159,000 wage and salary jobs in 2008.
Employment in the steel industry is broken into two major sectors: iron
and steel mills and ferroalloy production, which employed 98,900
workers; and steel products from purchased steel, which employed 60,100
workers. The steel industry traditionally has been located in the
eastern and midwestern regions of the country, where iron ore, coal, or
one of the other natural resources required for steel are found. Even
today, about 42 percent of steelworkers are employed in Pennsylvania,
Ohio, and Indiana. The growth of EAFs has allowed steelmaking to spread
to virtually all parts of the country, although many firms find lower
cost rural areas the most attractive. Although most steel mills are
small, about 88 percent of the jobs in 2008 were in establishments
employing at least 100 workers.
STEM Degree
Paths into this Industry
Engineers,
chemists, and computer specialists are playing increasing roles at steel
mills, helping to address a variety of issues. Metallurgical engineers
work with the metals and ores that go into steel in order to change or
improve its properties or to find new applications for steel. They make
adjustments to the steel-making process in response to quality control
issues. Industrial engineers work in process control and use computer
models to design production processes to maximize efficient production
of each job. They also work with engineers from other specialties to
make plants more productive and energy efficient by designing and
installing the latest technology. Mechanical engineers often are found
in supervisory or management jobs, helping to solve mechanical problems
on the production line. Environmental engineers design environmental
control systems to maintain water and air quality standards or to clean
up old sites.
Industry
Forecast
Job
opportunities should be very good for engineers and skilled production
and maintenance workers despite a projected decline in employment over
the 2008-2018 period.
Employment in the
steel industry is expected to decline 13 percent over the 2008-18
period, primarily due to increasing consolidation, improvements in
productivity, and strong foreign competition. Automation,
computerization, and changes in business practices have created a leaner
workforce and reduced the number of work-hours needed to produce a ton
of steel in the last few decades. These productivity improvements, which
were a leading cause of employment declines in the past, are not
expected to be a powerful factor in the future, as most companies have
automated the process as much as they can. Technological improvements,
however, will continue to be made, affecting the number and type of
workers hired. Low-skilled jobs will continue to be automated and the
jobs that remain will require more education and training.
EAF mills, with their
leaner workforce and lower cost structure, are expected to benefit from
the industry's transformation and will continue to gain market share.
They now produce more than 50 percent of the country's steel, up from 25
percent two decades ago. They are improving the quality of the steel
they make by melting pig iron along with the scrap. In this way, they
can more effectively compete with integrated mills in markets that
demand higher quality steel. Thus, as EAFs continue to grow in relation
to integrated mills, job opportunities will be better at these mills.
Employment in the
steel industry varies with overall economic conditions and the demand
for goods produced with steel. Much of the demand for steel is derived
from the demand for products that consume large amounts of steel.
Industries that are significant users of steel include manufacturers of
structural metal products used in construction, motor vehicle parts and
equipment—a typical car uses about a ton of steel—and household
appliances. Many of these goods are expensive, so the consuming public
is less likely to purchase them during economic downturns.
The economic growth in
developing countries will drive global demand for, and the price of,
steel. These developing countries may use large amounts of steel in the
construction of buildings, bridges, and other infrastructure. In
addition, as these countries grow wealthier, their citizens are
purchasing more automobiles, appliances, and other steel products.
Rapidly growing output
of the Chinese steel industry, however, also may have an impact on the
amount and price of steel in the global market. As Chinese steel
production continues to grow, demand for domestically produced steel may
further weaken.
The push for cleaner
energy may increase domestic demand for steel. As the Nation moves away
from burning fossil fuels for energy consumption, the building of
nuclear power plants and wind turbine towers will result in greater
demand for steel, including large amounts of reinforcing and rolled
steel. Once new power generation plants come on line, there also will be
a need to transport electricity, which may further result in demand for
steel.
Despite the projected
decline in the number of jobs in the industry, job opportunities are
expected to be good for a number of occupations. Demand is expected to
be good for all types of engineers, including mechanical, metallurgical,
industrial, electrical, and civil. Companies report great difficulty in
hiring these highly skilled professionals.
Related
Degree Fields
Professional
Associations
Note: Some resources in this section are provided by the US Department
of Labor, Bureau of Labor Statistics.
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