The US steel industry has more than 100 steel units, producing 98 million tons of steel shipments worth $ 75 billion in 2014.
The steel industry directly employs about 1,50,000 people in the United States and directly / indirectly supports more than 1 million American jobs.
Labor productivity has increased fivefold since the early 1980s, when the average steel mill produced 10.1 man-hours of steel. And in 2014, the average fell to 1.9 workers.
*** Domestic production of American crude steel
In the week ending October 10, 2020, US domestic crude steel production was 1,502,000 tons net, while US crude steel production and extraction rates exceeded 2 million, with some crude steel sold unsold. To be able to pay off some of the country’s mineral debts.
US crude steel production is down 16.8 percent this week from a year earlier. Production for the week ending October 10, 2020, compared to the previous week ending October 3, 2019, was a difference of 200,000 tons, which is due to lower US steel demand in the North American region.
This year, because most of the construction projects have extended the delivery time of the project, or in some cases, they have been forced to stop the project due to the coronavirus epidemic. This severely affected US steel production and sometimes shut down some small producers.
*** Challenges of the American Steel Industry
One of the challenges facing US crude steel has been to reduce the economic growth rate of crude steel due to the imposition of tariffs on US steel imports. With the slogan of developing and supporting domestic production on the import of non-American goods, especially Chinese, Trump sought to support the country’s steel industry and to wage a kind of trade war campaign with China.
But for American industrialists, this may have seemed appealing at first, but over time it lost its effectiveness and became a potential threat because the supply of raw materials from within the United States was at a higher cost than world prices. On the other hand, any import from Sai countries was subject to heavy tariffs.
The issue has escalated to the point where executives at major companies such as General Motors and Ford de Detroit have laid off workers temporarily, effectively lowering the US employment rate to the extent that Trump maneuvered in the run-up to the election. Be considered a threat to himself. At present, US steel has no choice but to cut prices to maintain a competitive advantage.
*** Support measures
As steel prices continue to fall, the US steel industry will face major challenges. Even as protectionist measures have been taken recently to give a new lease of life to the American steel industry, they are being applied to some imported steel products, and are considered a kind of hidden cocoon to foreigners. Therefore, tariffs alone may not be able to play their true role in supporting US steel development in helping steel producers.
While all tariffs appear to be designed to reduce US crude steel production costs, maintaining the price level in the short term will provide some good support for the US steel market, but this solution solves the broader challenge. Wet is powerless in the world market and it is nothing but the elimination of excess crude steel production capacity. In addition, the recent tariffs do not create new market demand for US steel products, nor do they save companies with high costs in US steel production.
*** Heavy pressure on the steel production chain
In other words, if the United States continues this trend for its steel production policy, it will soon lose the foreign market because of the heavy pressure on its crude steel production chain. These factors and many others put heavy pressure on the industry because The debt burden is reaching uncontrollable levels and global expectations for growth are very high, and China can easily meet this demand pressure and effectively take over the US international steel market. The United States has no choice but to make major changes to its balance sheet and export performance to help steelmakers maintain market share and remain competitive.
The US steel industry faces a number of challenges this year, which we will address below:
*** Slowing down the markets
The declining scale of real estate and infrastructure projects in the United States has made it a challenge to speed up the distribution of crude steel in the United States. This has reduced the market’s need for steel inputs and other commodities. Demand for steel, especially materials for energy and mining projects, is declining as commodity markets are less popular.
*** Global surplus capacity
Steel is one of the main industries consuming electricity. About 400 megawatts per year is global surplus capacity, about 20 percent of which is allocated to the United States. This will put the energy infrastructure in the United States at great risk.
In general, the US steel industry needs huge changes in its production and export policies. If these conditions are not corrected, we will most likely see a decline in steel exports and production in this country. On the other hand, if Biden becomes President of the United States, the green economy plan will bring the field of mining and steel activities with a new challenge. This position can weaken the global dollar and lower economic indicators in all markets.
According to a large number of steel experts, the unemployment rate in the United States is increasing day by day due to Trump’s import tariffs, which could affect the outcome of next month’s US elections and, as a result.
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