Less than a decade ago, the domestic steel industry seemed to be
collapsing under a string of bankruptcies and a flood of imports that
made steel a potent symbol of the failures of U.S. manufacturing in a
global world.
The industry shed more than 400,000 jobs in the United States from the
1980s to the early part of the current decade. More than 40 companies
tumbled into bankruptcy, leaving thousands of retirees without health
coverage and with sharply reduced pensions. Many of the bankrupt
companies were later snapped up by private-equity firms, which were
able to restructure the mills into larger, more-efficient enterprises
that in many cases found new investors. The new owners invested in
technology, and freed of the pensions and other legacy costs that
burdened previous owners, they were able to run the businesses more
cheaply.
Now, steel prices are at historic highs, surging 70 percent in the past
year alone, along with the prices of the iron ore, coke, scrap, gas and
coal used to make steel. The escalating prices have not dampened demand
even during the ongoing U.S. economic downturn, as much of the steel on
the global market is being consumed in China, India and fast-developing
areas of the Middle East.
"I have never seen anything like it, and I have been in the business 45
years," said Barry Rhody, president of E&E Corp., a steel
consultancy. "There has been unprecedented demand for steel."
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