On a trend basis, steel prices will fall in real terms in the late '90s, he forecasts. Now is the time for steelmakers to do some bold strategic management to position their companies for the next downturn and beyond. Japanese minimills like Tokyo and Toa Steel are engaged in big capital-spending programs to reduce manufacturing costs and expand their product lines. U.S. steelmakers need to compete in price with Brazilian and other world steelmakers, or GM will shift more vehicle production overseas, counters GM steel buyer Ron Schuster. Others, such as Nucor, sell at the same price to everybody and are efficient enough to make money at higher or lower prices.
Captive markets can cushion companies in downturns.
Inland in its service-center division. Other minimills have geographical niches. Particularly while the U.S. dollar is weak, now is the time for mills to increase their exports and overseas ventures. When the dollar appreciates, U.S. mills will lose a competitive advantage against foreign competitors. Even as they narrow their focus to upscale markets, Big Steelmakers have less flexibility in production volumes because of their blast furnaces and high fixed costs.