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Career Handbook - Steel Manufacturing Introduction
Steel Manufacturing

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Key Points of Interest:
  • Employment is expected to continue to decline due to consolidation and further automation of the steelmaking process.
  • Employers staffing production jobs increasingly prefer individuals with 2-year degrees in mechanical or electrical technology.
  • Opportunities will be best for engineers, computer scientists, business majors, and skilled production workers.

Faced with international competition and a worldwide glut of steel, the U.S. steel industry continues to respond by modernizing its manufacturing processes and consolidating businesses to increase productivity. Despite successful efforts to reduce costs and an improving competitive position, steel manufacturing firms still face stiff competition(and employment is expected to continue to decline. However, investment in modern equipment and worker training has transformed the U.S. steel industry from one of the Nation's most moribund to one of the world's leaders in worker productivity and the lowest cost producer for some types of steel.

Establishments in this industry produce steel by melting iron ore, scrap metal, and other additives in furnaces. The molten metal output is then solidified into semifinished shapes before it is rolled, drawn, cast, and extruded to make sheet, rod, bar, tubing, and wire. Other establishments in the industry make finished steel products directly from purchased steel.

The least costly method of making steel uses scrap metal as its base. Steel scrap from many sources—such as old bridges, refrigerators, and automobiles—and other additives are placed in an electric arc furnace, where the intense heat produced by carbon electrodes melts the scrap, converting it into molten steel. Establishments that use this method of producing steel are called electric arc furnace (EAF) mills, or minimills. The smaller initial capital investment required to start and operate an EAF mill has helped drive the growth of this production method. Moreover, scrap metal is found in all parts of the country, so EAFs are not tied as closely to raw material deposits as are integrated mills and can be placed closer to consumers. EAFs now account for about half of American steel production, and their share is expected to continue to grow in coming years.

The growth of EAFs comes partly at the expense of integrated mills. Integrated mills reduce iron ore to molten pig iron in blast furnaces. The iron is then sent to the oxygen furnace, where it is combined with scrap to make molten steel. The steel produced by integrated mills generally is considered to be of higher quality than steel from EAFs but, because more steps are involved in the production process, it also is more costly. The initial step in the integrated mill process is to prepare coal for use in a blast furnace by converting it to coke. Coal is heated in coke ovens to remove impurities and to reduce it to nearly pure carbon.

At the other end of the steel manufacturing process, semifinished steel from either EAFs or integrated mills is converted into finished products. Some of the goods produced in finishing mills are steel wire, pipe, bars, rods, and sheets. Products also may be coated with chemicals, paints, or other metals that give the steel desired characteristics for various industries and consumers. Also involved in steel manufacturing are firms that produce alloys by adding materials such as silicon and manganese to the steel. Varying the amounts of carbon and other elements contained in the final product can yield thousands of different types of steel, each with specific properties suited for a particular use.

Steel companies, like most businesses, have entered the era of sophisticated technology. Taking several forms, this technology has improved both product quality and worker productivity. Computers are essential to most technological advances in steel production, from production scheduling and machine control to metallurgical analysis. Computerized systems change the nature of many jobs, while they eliminate or reduce the demand for others.

For workers, modernization of integrated and EAF steel mills often has meant learning new skills to operate sophisticated equipment. Competition also has resulted in increasing specialization of steel production, as various producers attempt to capture different niches in the market. With these changes has come a growing emphasis on flexibility and adaptability for both workers and production technology. As international and domestic competition continue for U.S. steel producers, the nature of the industry and the jobs of its workers are expected to continue to change.

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Data Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2004-05 Edition