FAIRFIELD: At this World War I-era mill near Birmingham, the construction of a new furnace signals a major shift for American steelmaking, as the country’s two remaining major steel producers face mounting pressure from a flood of low-priced imports.
U.S. Steel Corp.’s first electric arc furnace in decades is a step toward replacing the iconic steelmaker’s stable of iron-ore-reliant blast furnaces with a more flexible scrap-based process that allows for stopping and starting production when there isn’t enough demand to keep churning out steel.
Just over an hour’s drive away, in Decatur, Nucor Corp., the other big American steelmaker, has been turning old cars and refrigerators into fresh batches of steel for more than a decade, with two electric arc furnaces and a flexible, nonunion workforce. Those methods helped Charlotte-based Nucor overtake U.S. Steel last year to become America’s biggest steelmaker by production capacity.
“If you can’t beat ’em, join ’em,” said Deutsche Bank analyst Jorge Beristain. “The granddaddy of old-fashioned steel companies is now saying it needs more variable production.”
The two companies are the only U.S.-based steelmakers left in the top 50 global steel producers, a list now dominated by Chinese companies.
The American steel industry is being reshaped by a global steel glut fueled by China’s surging production, which has pushed steel prices down 23% since Jan. 1. U.S. steel companies, including U.S. Steel and Nucor, this month asked the government for protective import tariffs on steel from China and four other countries. The oil-price collapse has further damped steel demand in recent months, especially in the U.S., as producers have pulled back on tube and pipe orders.
