The Steel Industry Isn’t Rebounding Quite Yet, But Hopefully the Worst is Behind Us

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

Steel executives, union leaders and manufacturing experts told Members of Congress on Wednesday that America's steel industry remains at risk because of unfair foreign imports, noting that a further decrease in America's steel producing capabilities threatens our national security. 

The Congressional Steel Caucus hosts a briefing each year to examine the state of the steel industry. After several years of dire warnings about the devastation occurring in steel communities because of imports from China, this time around witnesses told the Members that trade enforcement has helped stabilize the sector.  

But they emphasized that the steel imports crisis is far from over. 

"Without continued action, America's steel sector will remain in peril," testified Tom Conway, the international vice president of the United Steelworkers. "Capacity utilization at U.S. mills is increasing, but it is gaining slowly... Now is not the time to do a 'victory lap' but, rather, to accelerate the actions we can take."

More than 13,500 U.S. steelworkers have faced layoffs because of the steel imports crisis, which is largely driven by China's massive industrial overcapacity. In response, the United States issued several sets of anti-dumping and countervailing duties on some unfair Chinese steel imports, which alleviated some of the pain.

About 200 workers in Granite City, Ill., and others on the Iron Range in Minnesota have been called back to work. But thousands of steelworkers remain laid off — and this past month, about 600 of them in Lorain, Ohio were notified that the temporary closure of tubular operations at the city's U.S. Steel plant would become permanent.  

"Other facilities across the country over the last several years have also announced layoffs," Conway said. "This is not 'rebounding,' but hopefully, a bottoming out." 

Members of Congress have a role to play to help these steelworkers. Conway and the other witnesses — including Alliance for American Manufacturing President Scott Paul — pushed for specific policies such as infrastructure investment, trade enforcement and efforts to strengthen our defense industrial base to safeguard our national security.   

Any infrastructure package, they noted, should include strong Buy American preferences that ensure tax dollars are reinvested into local communities and create jobs.  

Those preferences should also follow the "melted and poured" standard, which states that all steel manufacturing processes take place in the United States to qualify for Buy America. This is important because Buy America opponents — like the Russian steel company NLMK —are lobbying to weaken Buy America by allowing imported foreign steel to qualify, so long as it is finished in the United States. 

But strengthening the steel industry isn't just about jobs, the witnesses said — it's also about keeping America safe. 

Case-in-point: Right now, AK Steel is the only steelmaker that manufactures electrical steel in the United States, said Roger Newport, the company's chief executive officer.  

This type of steel is needed for transmission and distribution transformers for energy systems.  A surge of unfairly traded steel imports led to a decrease in American-made electrical steel — and that's putting America at risk, Newport said. 

"If large power transformers are destroyed by a terrorist attack, natural disaster, or simply old age, critical parts of the U.S. electric grid could be down in a region for an extended period of time, causing a significant impact on national security and the U.S. economy," Newport testified. "If domestic electrical steel production and transformer protection is not maintained in the U.S., the future could entail a situation where the U.S. is 100 percent reliant on foreign producers, like China, to supply these critical materials." 

Our military also depends on American-made steel for things like armored vehicles and aircraft. The U.S. Navy, for example, needs steel for its ships, said Bryan Clark, a senior fellow at the Center for Strategic and Budgetary Assessments

"The military shipbuilding industry exemplifies the need for a robust steel industry," he testified. "Ships use hardened steel for armor, specialized alloys for sensor and weapons housings, and high-carbon forged steel for machinery components that all require different production processes." 

Tracy Porter, executive vice president of Commercial Metals and the chair of the Steel Manufacturers Association, noted that despite the challenges, domestic steelmakers remain optimistic about the future of the industry. Commercial Metals built a new micro mill in Durant, Okla., that will be up-and-running later this year, he said. 

"To support investments of this magnitude, we must enforce our trade laws and address the harm caused by the unfair trade behavior of some foreign nations," he added. "We are appreciative of the trade law updates that were enacted during the 115th Congress... we must now make sure that our government agencies fully utilize the tools and resources that Congress has given them." 


This was reposted from AAM.