Ferrous Departments

STEEL IMPORTS CLIMB; PRODUCTION STEADY

Based on U.S. Department of Commerce data, the American Iron and Steel Institute (AISI), Washington, determined that the U.S. imported more than 24 million net tons of steel mill products in the first nine months of 1997, a 16.5 percent increase over the 20.7 million net tons imported in the first three quarters of 1996.

Steel imported from Russia was up a staggering 243 percent over the 1996 pace, with more than 2.7 million tons shipped in 1997 versus just 800,000 tons during the first nine months of 1996. The second largest percentage increase in imported steel came from Turkey, with shipments up 93 percent over the previous year. Steel shipments from western Europe and Canada were down from the 1996 pace.

U.S. mills also remained ahead of the 1996 pace in steel shipped abroad, up 14.8 percent over the first nine months of 1996. September 1997 was a strong month, with shipments up 48 percent over September 1996.

1997 GLOBAL STEEL PRODUCTION UP 6.2 PERCENT

The world’s steel makers produced 6.2 percent more crude steel in the first ten months of 1997 than they did in the same period in 1996, according to the International Iron and Steel Institute (IISI) Brussels, Belgium. Much of the added steel was produced in western Europe and Asia, although Mexican steel makers also recorded several consecutive months of increased output in 1997.

Asian and western European steel producers posted greater than 7.5 percent gains in total output in the first ten months of 1997, while North American steel makers showed only a 3.4 percent output gain compared to the 1996 time frame. Mills in the United States produced only 2.2 percent more steel year-to-date compared to 1996.

Asia’s steel industry produced nearly 245 million tons of crude steel in the first ten months of 1997, while western Europe’s industry shipped 132 million tons and North America’s mills produced 106 million tons.

BIRMINGHAM STEEL MELT SHOP STARTS UP

Operations have begun at Birmingham Steel’s new melt shop in Memphis, Tenn. The melt shop’s capacity is one million tons per year, according to Bob Garvey, chairman and CEO of the Birmingham, Ala.-based company. The new facility will produce steel billets for the company’s bar and rod rolling mills located near Cleveland.

“We are anticipating a steady ramp-up of production at Memphis, and expect the melt shop will be operating at a rate of 75 percent of capacity by June 1998,” says Garvey.

AMERISTEEL POSTPONES IPO

AmeriSteel Corporation has postponed making an initial public offering (IPO) of shares of its common stock. After filing a registration statement with the Securities and Exchange Commission (SEC) for the IPO, AmeriSteel came within days of making the stock available for sale. According to a company spokesperson, the IPO was postponed—along with  the stock offerings of many other companies being prepared for December—after money managers became worried about the Asian economic woes and the potential impact on the rest of the world. 

AmeriSteel, based in Tampa, Fla., operates four non-union steel minimills and 16 downstream processing operations that produce finished steel products primarily for use in construction and industrial markets. The manufacturing and processing facilities are located throughout the southeastern United States. AmeriSteel is owned by a holding company that is 90 percent owned by Kyoei Steel Ltd., a Japanese minimill company.

FALLING STEEL PRICES LINKED TO OVERCAPACITY?

Demand for steel remains strong, according to most statistical indicators, but falling prices in certain segments are nonetheless a reality. That has caused many analysts to point to a singular conclusion: added capacity is making the market much more competitive.

More mini-mills coming on-line with the ability to make cold-rolled sheet steel have made that segment in particular one to watch, according to industry analysts.

Will the drop in steel prices also result in a drop in ferrous scrap prices? As of yet, that hasn’t occurred, and it may be difficult for steel makers to force prices down if the market remains one where demand for scrap is strong.