Understanding the domestic steel industry
The charts and graphs below are statistics regarding the steel industry in the United States.
U.S. domestic steel shipments: 1980-2019
Although annual shipments by U.S. steel mills averaged almost 106 million tons from 1997-2007, shipments have failed to exceed 100 million tons in any year since the start of the Great Recession. Annual shipments over the past 10 years have averaged only 92 million tons. The past few years have seen domestic shipments improve following the import surge that started in 2014. High imports caused inventories to swell which derailed shipments by U.S. mills in 2015 and 2016. Import restrictions, including the Trump Administration’s Section 232 tariffs effective in March 2018, have helped domestic mills to regain market share and increase shipments. While Section 232 tariffs have received several changes and exemptions for certain trading partners, they have been successful in keeping imports low and supporting demand for domestically-produced steel for the past two years. After 5% year-over-year growth in both 2017 and 2018, domestic shipments grew by only 1% year over year in 2019 to 96 million tons. This is due to weakened manufacturing activity, various trade conflicts and softer global economic growth. Steel shipments for 2020 are expected to decline due to the COVID-19 pandemic’s negative impact on steel demand.
Steel production vs. employment in the United States: 2000-2019
Steelmaking processes have transformed at a rapid pace, reflecting the industry’s improvement in operating practices and investments in state-of-the-art equipment to increase productivity. Employment by U.S. steel mills has declined from approximately 135,000 in 2000 to almost 86,400 in 2019, due to a consolidated and more efficient industry and automated processing. In 2000, one employee accounted for 831 net tons of raw steel production, while in 2019, one employee accounted for 1,119 net tons of raw steel production, an increase of 39%. Following the implementation of the Section 232 tariffs on steel imports in 2018, the number of employees in the US steel industry increased by 2.1% in 2018 and 3.5% in 2019 to its highest level of employment since 2015. Employment numbers are expected to decline for 2020, as facilities have been idled due to the COVID-19 pandemic’s impact on steel demand.
U.S. raw steel production and capacity utilization: 2000-2019
Global overcapacity remains a significant issue for the industry. In 2015, U.S. raw steel output fell to its lowest level since 2009 due to a surge in imports in 2014, along with subsequent inventory corrections. However, since 2015, the U.S. raw steel production capacity utilization rate has increased in each of the last four years, as domestic production has been supported by lower import levels. In 2019, the capacity utilization rate rose to 80%, the highest level since 2008. For comparison, capacity utilization averaged 87% from 2000-2007. The COVID-19 pandemic has significantly impacted U.S. steel demand, prices and production. As a result, steel production and capacity utilization are expected to decline in 2020.
