Steel imports grabbed a record market share last year, and things got even worse for the steel industry in 2015.
Northwest Indiana's signature business had its roughest patch since the late 1990s and the early 2000s, when steelmakers that had been around for decades vanished in the bankruptcy courts.
Imports got even worse, rising to nearly a third of the market share for much of the year. The tubular business, which helped prop up U.S. Steel during the downturn, collapsed after the price of crude oil dropped by half. Steel prices tanked because China flooded world markets with steel it was selling at an average loss of $75 a ton as its economy cooled off but its steel mills continued to crank out just as much metal as before.
The U.S. market ended up particularly hard-hit, to the point where analysts started talking about mills closing and further consolidation in an industry that just went through an unprecedented round of consolidation a decade ago.
Some steel market watchers predicted that ArcelorMittal could close its Indiana Harbor West operation, but the company has consistently said it intends to maintain all its blast furnaces in America, even as it looks to "rationalize" finishing operations.
"I live in Northwest Indiana and have seen the devastation, working at Inland Steel," Michael Rippey, chairman of ArcelorMittal USA, testified before the Congressional Steel Caucus at its annual hearing on the state of steel in Washington, D.C., in March. "Thirty-one steel companies went bankrupt, and it meant the loss of jobs in so many communities. We're doing OK, but with the presence of surging imports, the future's not bright for us."
ArcelorMittal, which says it has lost close to $300 million a year in America over the last half-decade when capital costs are factored in, idled the Indiana Harbor Long Carbon Facility, which resulted in the loss of 304 jobs in East Chicago. The Luxembourg-based steelmaker let go of another 57 workers when it canceled a trucking contract with P.T.O. Services, which hauled steel out of the Indiana Harbor steel mill, including to the I/N Tek and I/N Kote finishing facilities in New Carlisle.
U.S. Steel sent home 369 workers when it idled its East Chicago Tin facility and laid off another 323 workers when it shut down its 107-year-old coke plant at Gary Works, where it once operated 838 coke ovens. The Pittsburgh-based steelmaker laid off 83 new hires in Northwest Indiana, temporarily laid off another 285 workers at Gary Works in another round of blood-letting in May, and sent layoff warning notices to 9,000 workers across the country, which was nearly a quarter of its total workforce at the time.
Outside of Northwest Indiana, ArcelorMittal laid off 226 workers at a South Carolina wire rod mill. U.S. Steel announced further layoffs in the St. Louis area, Texas, Alabama, Minnesota and Ohio.
The downturn came at the worst possible time for the United Steelworkers union, which has been negotiating a new contract since the current contact expired in September. Both ArcelorMittal and U.S. Steel want to freeze payrolls and make deep cuts to health care benefits. Under the company's proposal, U.S. Steel employees could have to pay up to $6,300 more per year in out-of-pocket costs.
Steelworkers say the industry has always been cyclical, and good times are on the horizon. There have been a few bright spots, including a rebound in commercial construction.
Automakers also are on pace to produce 17 million units in 2015 and are projected to make a record 17.6 million vehicles next year, which would boost demand for steel, Nucor CEO John Ferriola said at a World Steel Association conference in Chicago in October.
Steelmakers also filed three major trade cases that will result in tariffs, which may slow the tide of imports and finally raise prices on hot-rolled steel, cold-rolled steel and other metal products.