UNFAIRLY TRADED STEEL IMPORTS UNDERCUT OHIO STEEL PRODUCTION, SHIPMENTS, CAPITAL SPENDING IN FOURTH QUARTER

COLUMBUS, Ohio (March 4, 1999) –  Surging steel imports caused sharp decreases in fourth-quarter leading indicators for the Ohio steel industry, with steel production dropping 17.3 percent as compared with fourth quarter 1997. Shipments fell 8 percent and capital spending declined 38.2 percent.

The Ohio Steel Council said unfairly traded steel imports put the lid on what started out as a strong year for the Ohio steel industry, causing prices to drop and Ohio steelworkers to be laid off in the last half of 1998.

For the year ending December 1998, production and shipments were up a modest 4 percent as compared to 1997, reflecting the strength of the pre-import first half. Capital spending was down 16.3 percent, or $83 million, from $509 million in 1997.

"The overall impact of the unfair imports was partially offset by significant gains that Ohio steel producers posted in the early part of 1998," said George Manos, co-chair of the Council and vice president of business processes at USS/KOBE Steel Company in Lorain.

"The favorable market conditions that contributed to the stronger first half ultimately gave way to the flood of unfairly traded imports, which hit hardest in the fourth quarter and caused a sharp drop in the leading indicators."

In January 1999, the Steel Council projected steel industry capital spending at $538 million for 1999, noting that the spending would be contingent on an improvement in the import situation.

Capital spending remained steady through the first half of 1998 but fell in the third quarter because of concern about economic conditions. Faced with falling shipments and prices, steel producers were forced to further reduce capital spending in the fourth quarter.

Employment figures, which show little change in the fourth quarter, do not reflect layoffs, since laid-off employees are still employees, according to Youngstown State University's Center for Urban Studies, which compiles the quarterly statistics.

Because 1998 figures reflect data from an additional Council member company not counted in 1997, fourth quarter decreases between the two years would actually be greater than indicated in the present data.

The Ohio Steel Council, in existence since 1991 and appointed by the governor, is a public-private partnership designed to strengthen ties among the steel industry, the state of Ohio and its citizens. The Council's member organizations are AK Steel Corp., Armco Inc., CSC Ltd., LTV Steel Co., North Star Steel Ohio, Pittsburgh Logistics Systems, Inc., Republic Technologies International, The Timken Company, USS/KOBE Steel Company, Washington Steel, WCI Steel, Inc., Wheeling-Pittsburgh Steel Corp., the United Steelworkers of America, the Ohio Legislature, Ohio Department of Development, The Ohio State University and Youngstown State University.