Signs point to steel recovery

By GRACE WYLER

gwyler@vindy.com

youngstown

There are positive signs the steel industry is starting to recover from the economic downturn, Andrew Goodwin, general manager of Steel Business Briefing Americas, told local steel industry leaders at a seminar at the Youngstown Historical Center of Industry and Labor.

Representatives from the Mahoning Valley’s major steel manufacturers — including V&M Star, TMK IPSCO and McDonald Steel — were treated to a presentation Wednesday on the global outlook of the steel industry from Steel Business Briefing, a leading industry news source that has offices in Pittsburgh. The presentation was sponsored by the Youngstown/Warren Regional Chamber.

Globally, the price of raw materials is rising, and mills are starting to make money again, Goodwin said. The World Steel Association expects global demand will rise by 10.7 percent this year. China produces almost half the world’s steel, he added.

In the United States, production and capacity use are expected to improve significantly this year compared with 2009, said Chris Davis, managing editor of Steel Business Briefing’s North American edition. Production capacity could rise above 80 percent by the end of this year, he said.

As new and idled plants become active, however, the U.S. market could see a slight oversupply, Davis said.

The only major factor that could change a mostly positive outlook on the U.S. steel markets is the outcome of climate-change legislation that is being considered by the U.S. Senate, Davis said. Locally, steel manufacturers in the Mahoning Valley are well-positioned to take advantage of the Marcellus Shale natural-gas reserve, said Dan Hilliard, a Steel Business Briefing reporter.

New technology and drilling techniques have led to an explosion of development of the shale, a largely untapped natural-gas formation under eastern Ohio and much of Pennsylvania, West Virginia and New York.

Shale drilling will increase demand for oil-country tubular goods and specialized pipe and tube products, Hilliard said.

The U.S. Department of Commerce recently imposed a substantial tariff on Chinese tubular products, giving domestic manufacturers an advantage, he added.