World Steel Production and US Steel Imports
We present a short set of data to comprehend world steel production, and US steel imports. The press has cited that steel is only 2% of world trade. For every US steel job, there are 45 jobs that use steel and will have their costs and prices raised. The steel market is very complicated by the different types of steel, and how these fit into expanded US manufacturing. It is also complicated because most imported steel already comes in the form of products, and it would be complicated to find which products the US is or would be ready to produce. I won’t be pretending to do any deep analysis since I am not an expert on steel or an economist with knowledge of trade.
World Steel Manufacturing
China is the world’s overwhelming steel producer, at 49%, using 2017 data from the US census. Visitors to China notice the vast amount of cranes and concrete and steel housing and businesses being built in many large cities as the country becomes urbanized with its large population. Germany moved its Ruhr valley of steel production to China, partly so that it could lower its air pollution. The European Union in total is next with only 10%, including Germany at 2.6%. Then comes Japan (6%), India (6%), US (4.8%), South Korea (4%), Russia (4%), Turkey (2%), Brazil (2%), and all others totaling 11%. We also show Mexico at 1.2%, and Canada at 0.81%.
Industries that Use the Most Steel
Data from Worldsteel on use of steel in industries starts with Buildings and Infrastructure at 50%. Then comes Mechanical Equipment (16%), Autos (13%), Metal Products (11%), Shipping Rail and Transport (5%), Electrical Equipment (3%), and Domestic Appliances (2%).
US Steel Imports
We note that US steel imports fluctuate by year. In years from 2010 to 2017, they fluctuated from a low at $22.3 billion in 2016 to $37.8 billion in 2014. In 2017, they were at. $29.1 billion for 34.5 million metric tons.
In 2017, the largest regions for imports by value were Europe at $9.18 billion (31.5%), North America at $7.62 billion (26.2%) (which consists of Canada at $5.12 billion (17.6%), and Mexico at $2.50 billion (8.6%)), Pacific Rim at $7.13 billion (24.5%), South/Central America at $2.82 billion (9.7%), and others at $2.39 billion (8.2%).
In Europe’s 31.5%, European Union countries sold us $6.24 billion (21.4%), led by Germany at $1.83 billion (6.3%). Other leading European countries are Russia at $1.43 billion (4.9%), and Turkey at $1.18 billion (4.1%).
The leading Pacific Rim countries are Korea at $2.79 billion (9.6%), Japan at $1.66 billion (5.7%), and Taiwan at $1.26 billion (4.3%).
In South/Central America, the by far outstanding country is Brazil at $2.44 billion (8.4%).
Of course, one cannot neglect China, since it is cited as the bad boy in supporting steel production, and as we said, produces 49% of World steel. The US imported only $0.98 billion (3.4%) from China.
I always like to scale things by the US GDP of $17.4 trillion. Steel imports of $29.1 billion is 0.17% of the GDP.
Steel Imports are 30% of Total US Steel
Let’s compare imported steel to US production. World steel production in 2017 is 1.7 billion metric tons. The US produces 4.8% of this, or 81.6 million metric tons. The US in 2017 imported 34.5 million metric tons. The total US available steel was then 116.1 million metric tons. So we made 70% of our total steel, and imported 30%.
Steel Imports as a Share of the Balance of Payments
In 2017, the US negative Balance of Payments was $566 billion. (Oddly enough, this was larger than the past 8 years of the Obama Administration.). The $29.1 billion of the steel imports was 5.1% of the balance of payments.
Steel Employment versus Steel Users
Steel production jobs have been between 80,000 and 90,000 for a decade. Aluminum has been at 60,000. Global steel jobs fell by 50% between 1972 and 2014 due to increasing efficiency and automation. There are 5,000 iron miners in the US, with 80% in Minnesota. There are also a few thousand miners in metallurgical coal used in steel. These data were pointed out in BloombergView by Judith Fox, March 2, 2018.
Also cited were jobs in metal makers and users that will be affected by the price rise of steel. Fabricated metal products were 1.5 million, machinery 1.1 million, motor vehicles and parts 1.0 million, aerospace 0.5 million, and primary metals 0.4 million. These total 4.5 million. Taking the ratio of 4.5 million to 100,000 steel production and miners, is the 45 to 1 jobs affected by steel price increases ratio that has been cited in the news.