Like nearly all other industries, steel competes in a global economy. What happens half way around the globe has an impact on pricing, demand and markets in Ohio and the U.S. That impact is particularly significant because markets for many steel products – although not all – are commoditized, which means pricing rather than product features frequently determines which company gets the sale. Meanwhile, the costs that go into making steel – for energy and raw materials (coke, iron ore, limestone, scrap steel) – are determined by forces in local and global markets that are often beyond the steelmaker’s control.
Competing against steel produced in foreign countries is challenging when foreign governments heavily subsidize steelmaking. Sometimes foreign countries produce steel in excess of their ability to consume it and then sell it to other countries at prices below production cost. These practices are illegal if they cause harm to U.S. steel companies but, unfortunately, they can take time to detect and prosecute.
Competing against steel produced in foreign countries is challenging also because there can be different labor costs and different rules concerning the environment.
Some Ohio steel companies today have facilities in many countries, not just one. Producing steel or steel products abroad is, in many cases, required if the company is to do business in those markets.
In spite of these complex global challenges, the U.S. steel industry continues to prosper due to the following:
- Exceptional service to customers;
- A highly trained workforce;
- Capital investments in Ohio facilities that have ranged from $300 to $700 million per year over the last 25 years;
- New work rules that enable steelworkers to be trained in multiple positions for greater flexibility in responding to demand;
- Consolidation of steel companies enabling better management of resources in response to market changes; and
- Collaboration between steel companies and the United Steelworkers.