Steel Mills

Forbes Article Suggests Nucor* Responsible for Demise of Steel Industry

March 26, 2017

The article title is “Dan DiMicco’s Nucor Has Killed Off More Of The American Steel Industry Than China Ever Has” and was written by Tim Worstall, a Fellow at the Adam Smith Institute in London, England. The article, which can be seen in its entirety online, points out, “That American steel industry which has suffered more from the competition of Dan DiMicco’s Nucor than it has from anything the Chinese have done.”

His main theme in the article is the growth of the electric arc furnace (EAF) segment of the steel industry has come at the expense of the less nimble fully integrated industry that uses blast furnaces and BOF’s. Technological change, not trade with China, has been the downfall of the integrated steel industry.

Mr. Worstall says about Dan DiMicco’s belief that the American steel industry needs trade protection:

“…Have a look at any particular steel mill you want to think about, one that has closed, gone bust, whatever, and you’ll almost always find that it was a blast furnace site.

“That’s just what has been happening. Technological change, not trade change nor China. And here’s the kicker. Nucor isn’t the only minimill operator but it’s one of the largest in the world. And it pioneered both the basic idea and many of the refinements to the technology over these past decades. It’s a useful shorthand to say that, even if it’s not accurate it’s shorthand, Nucor killed off those blast furnace parts of the American steel industry. And now we’ve got the ex-CEO of Nucor arguing that the American steel industry needs trade protection?

“That’s industrial grade brazen chutzpah right there. The people that cut a swathe through an American industry demand trade protection for that industry they cut a swathe through? Almost admirable in its effrontery really.”

Now there is President Donald Trump and his new, very pro-steel, administration. Here is a list of those associated with the steel industry that either have jobs in the administration or are slated to get jobs: Dan DiMicco served as Trump’s head trade advisor and transition head. Wibur Ross, steel consolidator who bought bankrupt steel mills and then sold the ISG steel mills to what is now ArcelorMittal, is the Secretary of Commerce. Other well-known names include Robert Lighthizer, former legal representative to the steel mills is the U.S. Trade Representative and Steve Vaughn is USTR’s General Counsel. Hopeful to be added to the administration are Jeff Garish for deputy USTR and Gil Kaplan for Under Secretary for International Trade at the Department of Commerce.

There are always two sides to a story and Steel Market Update is committed to presenting both sides. We will broach the concept of “free and fair trade” at this year’s SMU Steel Summit Conference as we attempt to provide as much market intelligence to the steel and manufacturing communities as possible. Come join us in Atlanta at the end of August (28, 29, 30, 2017) for our 7th SMU Steel Summit Conference. Details can be found on our website: www.SteelMarketUpdate.com/events/steel-summit

*Nucor is just one of a number of electric arc furnace steel mills which include others such as SDI, North Star BlueScope, NLMK Portage, SSAB, Big River Steel, etc.