By Andrea Holecek, Times of Northwest Indiana
andrea.holecek@nwi.com
The country's production of raw steel remained more than 55 percent below capacity last week, yet operations at Northwest Indiana's mills have increased slightly as business stagnates elsewhere.
As the demand for steel has slipped with the economy, steelmakers have slashed overall production. About a third of North America's blast furnaces are in operation, nine in the United States and three in Canada.
Five of the furnaces are in Northwest Indiana, one of the few places nationwide where the country's two largest steelmakers -- ArcelorMittal and U.S. Steel Corp. -- are concentrating their production.
"We're suffering but less than those in the east," said Paul Gipson, president of United Steelworkers Local 6787 at ArcelorMittal Burns Harbor. "In comparison, we're better off than they are."
Northwest Indiana's raw steel production increased 31,000 tons to 329,000 tons during the week ending March 7. That represented more than 50 percent of the 58,000 ton increase of the 1.038 million tons of steel produced nationwide.
Raw steel eventually becomes steel coils, bars and billets that are bought by the nation's manufacturers and service centers. In the past six months, the drop in consumer spending curtailed steel demand in the automotive, construction and industrial equipment sector.
"We're at full employment," said Jerry Littles, president of USW Local 1014 at Gary Works, in late February. "We're blessed because we're all working at Gary, but the benefits we're reaping are from the job losses at other plants."
As steel demand dropped, so have steel prices, which are at about half of the historic highs reached in midsummer 2008.
Steel analyst Charles Bradford said the integrated mills won't have an increase in orders until automobile sales climb. Nationwide, the automotive industry uses about 20 percent of domestic steel capacity, and the majority of the 20 percent is produced in Lake and Porter counties, he said.
Demand for manufactured products dropped by 1.9 percent in January, with a plunge in transportation equipment orders, the U.S. Department of Commerce reported. Orders for durable goods, items from aircraft to air conditioners to refrigerators, dropped by 4.5 percent for the month.
Steel Market Update, an online steel business publication, reported Wednesday that a survey of steel service centers and discussions with steel buyers indicated that the service centers, which are steel distributors, and the buyers are continuing to push inventory levels lower.
"In this week's survey, 55.2 percent of the companies reported continuing to lower inventories while 40.7 percent are maintaining current levels and 4.1 percent are building inventory," the newsletter states.