88


### IRON AND STEEL 1

(Data in million metric tons of metal unless otherwise noted)

Domestic Production and Use : The iron and steel industry and ferrous foundries produced goods in 2005 valued at about $126 billion. The industry consis ted of about 79 companies that produced raw steel at about 122 plants, with combined production capability of about 106 million tons. Indiana account ed for about 22% of total raw steel production, followed by Ohio, 16%, Michigan, 6%, and P ennsylvania, 6%. Pig iron was produced by 9 companies operating integrated steel mills with a bout 31 blast furnaces in continuous op eration. The dist ribution of steel shipments was estimated as follows: warehouses and steel service centers, 23%; cons truction, 15%; transportation (predominantly for automotive production), 13%; cans and containers, 3%; and other, 46%. About 1,100 ferrous foundries continued to be importers of pig iron into the Un ited States, mainly from Brazil, Russia, and Ukraine.

Salient Statistics—United States : 2001 2002 2003 2004 2005 e Pig iron production 2 42.1 40.2 40.6 42.3 33.1 Steel production: 90.1 91.6 93.7 99.7 92.4 Basic oxygen furnaces, percent 52.6 49.6 49.0 47.8 44.9 Electric arc furnaces, percent 47.4 50. 4 51.0 52.2 55.1 Continuously cast steel, pe rcent 97.2 97.2 97.3 97.1 96.7 Shipments: Steel mill products 89.7 90.7 96.1 101 102 Steel castings 3 0.8 0.7 0.7 0.7 0.7 Iron castings 3 8.3 7.8 7.5 7.5 7.4 Imports of steel mill products 27.3 29.6 21.0 32.5 30.1 Exports of steel mill prod ucts 5.6 5.4 2.5 7.2 8.4 Apparent steel consumption 4 107 107 107 117 122 Producer price index for steel mill products (1982=100) 5 101.3 104.8 109.5 147.2 161.3 Steel mill product stoc ks at service centers yearend 6 6.9 13.7 12.3 14.4 13.6 Total employment, average, number 7

Blast furnaces and steel mills 141,000 140,000 140,000 128,000 120,000
Iron and steel foundries e 117,000 116,000 116,000 116,000 115,000 Net import reliance 8 as a percentage of apparent consumption 16 15 10 14 15

Recycling : See Iron and Steel Scrap and Iron and Steel Slag.

Import Sources (2001-04) : Canada, 17%; European Union 9 , 17%; Mexico, 12%; Brazil, 10%; and other, 44%.

Tar iff: Item Number Normal Trade Relations

12-31-05 Pig iron 7201.10.0000 Free.
Carbon steel:

Semifinished 7207.12.0050 Free. Structural shapes 7216.33.0090 Free. Bars, hot-rolled 7213.20.0000 Free. Sheets, hot-rolled 7208.39.0030 Free. Hot-rolled, pickled 7208.27.0060 Free.
Cold-rolled 7209.18.2550 Free.

Galvanized 7210.49.0090 Free.
Stainless steel:
Semifinished 7218.91.0015 Free.

7218.99.0015 Free. Bars, cold-finished 7222.20.0075 Free. Pipe and tube 7304.41.3045 Free.
Cold-rolled sheets 7219.33.0035 Free.

Depletion Allowance : Not applicable.

Government Stockpile : None.

Prepared by Michael D. Fenton [(703) 648-4972, mfenton@usgs.gov, fax: (703) 648-7757]89


### IRON AND STEEL

Events, Trends, and Issues : During the first 8 months of 2005, mont hly pig iron production fluctuated near 3.0 million tons, and monthly raw steel pro duction fluctuated near 8.5 million tons. Production totals during these periods decreased about 19% for pig iron and 6.1% for steel from those of 2004. Steel production was trending upward during the first 8 months of 2005. Sh ipments of steel mill products for 2005 were down nearly 11% compared with those of 2004. Imports of steel mill products increased an estima ted 3.4% compared with th ose of 2004, and U.S. net import reliance as a percentage of apparent consumpti on exceeded an estimated 15%, the highest level since 2002.

The recovery of the global economy that began in late 2003 has been steady and gradual. The International Iron and Steel Institute (IISI) and the Organisation for Economic Co -operation and Development (OECD) estimated a world gross domestic product increase of 3.7% in 2005 compared with that of 2004. The U.S. Congressional Budget Office estimated the economic growth rate in the United States to be 3.7% in 2005 an d 3.4% in 2006, with a steady decline to 2.5% through 2015. World consumpti on of finished steel products was estimat ed to increase by 3.9% to 5.0% by IISI. The OECD expected world steel demand to increase by about 5%, driven by the continuing strong growth in demand in China, where steel consumption was expected to increase by nearly 11%. However, increasing energy costs, including those of oil, during late 2005 may negatively affect the global steel industry, as happened in 1973 and 1979 when oil prices rose dramatically. Global steel cons umption fell by 7.2% in 1975 and 11.6% in 1982, compared with that of the previous year, followed by a 6-year re cession. Declining demand during 2006 while capacity expands may result in a capacity surplus.

China continued in 2005 to be the fasted growing economy in the world and the world’ s leading steel producer and consumer. China’s 2005 steel production was an estimated 333 million metric tons, 22% more than that in 2004, but growth was expected to slow in 2006. The China Iron and Steel Association stated that the country’s new steel policy will result in significant consolidations of a fragmented steel sector, which shoul d reduce the threat of oversupply from China. China’s top 10 steelmakers were expected to contro l more than 50% of that nati on’s total steel output by 2010 and more than 70% by 2020.

World Production : Pig iron Raw steel

2004 2005 e 2004 2005 e

United States 42. 3 33.1 99.7 92.4

Brazil 32.9 34 31.2 31.5
China 252 290 272 333 European Union 9 107 107 *193 186

India 30.8 31 32.0 34 Japan 83.0 83 112 113 Korea, Republic of 28.0 28 47.5 49

Russia 53.1 48 64.3 64.2

Ukraine 31.0 30.3 38.7 42
Other countries 52 63 *158 146 World total (rounded) 712 747 *1,050 1,090

World Resources : Not applicable. See Iron Ore.

Substitutes : Iron is the least expensive and most widely used metal. In most applications, iron and steel compete either with less expensive nonmetallic materials or with more expensive materials having a performance advantage. Iron and steel compete with lighter materials, such as alumin um and plastics, in the motor vehicle industry; aluminum, concrete, and wood in construction; and alumin um, glass, paper, and plastics in containers.

e Estimated. *Corrected on March 2, 2006.

1 Production and shipments data source is the American Iron and Steel Institute; see also Iron Ore and Iron and Steel Scrap.

2 More than 95% of iron made is transported molten to steelmaking furnaces located at the same site.

3 U.S Census Bureau.

4 Defined as steel shipments + imports - exports + adjustments fo r industry stock changes + adjustment for imports of semifinishe d steel products.

5 U.S. Department of Labor, Bureau of Labor Statistics.

6 Metals Service Center Institute.

7 U.S. Department of Labor, Bureau of Labor Statistics. Blas t furnaces and steel mills: NAICS 33111; Iron and steel foundries: NAICS 33151.

8 Defined as imports - exports + adjustment s for Government and industry stock changes.

9 European Union membership increased from 15 to 25 as of May 1, 2004.

U.S. Geological Survey, Mineral Commodity Summaries, January 2006