IPA Provides Useful Information about the Steel Manufacturing Industry
Steel Manufacturing
IPA Statistics on Steel Manufacturing
SIGNIFICANT POINTS
- 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.
NATURE OF THE INDUSTRY
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.
WORKING CONDITIONS
Steel mills evoke images of strenuous, hot, and potentially dangerous work. While many dangerous and
difficult jobs remain in the steel industry, modern equipment and facilities have helped to change this.
The most strenuous tasks were among the first to be automated. For example, computer-controlled machinery
helps to monitor and move iron and steel through the production processes, reducing the need for heavy
labor. In some cases, workers now monitor and control the equipment from air-conditioned rooms.
Nevertheless, large machinery and molten metal can be hazardous unless safety procedures are observed.
Hardhats, safety shoes, protective glasses, earplugs and protective clothing are required in most production
areas.
Cases of occupational injury and illness in the industry were 8.6 per 100 full-time workers in 2002, higher
than the 5.3 cases per 100 workers for the entire private sector and slightly higher than the 7.2 cases per
100 for all of manufacturing.
The expense of plant and machinery and significant production startup costs force most mills to operate
around the clock, 7 days a week. Workers averaged 43 hours per week in 2002, and only about 2 percent of
workers are employed part time. Workers typically work varying shifts, switching between working days one
week and nights the next. Some mills operate two 12-hour shifts, while others operate three 8-hour shifts.
Overtime work during peak production periods is common.
EMPLOYMENT
Employment in the steel industry declined to about 170,000 wage and salary jobs in 2002, 80,000 fewer than
in 1992. The steel industry traditionally has been located in the eastern and midwestern regions of the
country, where iron ore, coal or one of the other natural resources required for steel are found. Even
today, about 46 percent of all steelworkers are employed in Pennsylvania, Ohio and Indiana. The growth of
EAFs has allowed steelmaking to spread to virtually all parts of the country, although many firms find lower
cost rural areas the most attractive. Large firms employ most workers in the steel industry. More than 65
percent of the jobs in 2002 were in establishments employing at least 250 workers.
OCCUPATIONS IN THE INDUSTRY
Opportunities exist in steel manufacturing in a variety of occupations, but the largest group of workers—47
percent— is employed in production occupations. Other large groups of workers are installation, maintenance,
repair, workers and transportation and material-moving workers.
Although the steel making procedure varies with the type of furnace used, the jobs associated with the various
processes are similar. Most jobs in steel mills can be classified into 1 of 3 types: Operators, maintenance and
repair workers, and supervisors and managers. In addition, significant numbers of electricians, engineers, inspectors
and testers and material-moving workers are needed to assist in the production process and repair of equipment.
Workers generally are assigned to work in a particular sector of the production line, such as the blast furnace or
rolling mill areas and their titles reflect the types of machines they work on.
At integrated mills, production begins when material-moving workers load iron ore, coke, and limestone into the
top of a blast furnace. As the materials are heated, a chemical reaction frees the iron from other elements in the ore.
Metal-refining furnace operators and tenders, also known as blowers and melters, direct the overall
operation of the furnace to melt and refine metal before casting or to produce specific types of steel. They gather
information on the characteristics of the raw materials they will use and the type and quality of steel they are expected
to produce. They direct the loading of the furnace with raw materials and supervise the taking of samples, to ensure that
the steel has the desired qualities. They may also coordinate the loading and melting of raw materials with the steel
molding or casting operation to avoid delays in production.
Generally, either a basic oxygen or an electric arc furnace is used to make steel. Operators and tenders use controls
to tilt the furnace to receive the raw materials. Once they have righted the furnace, they use levers and buttons to
control the flow of oxygen and other materials into the furnace. During the production process, testers routinely take
samples to be analyzed. Based on this analysis, operators determine how much longer they must process the steel or what
materials they must add to meet specifications. Operators also pay close attention to conditions within the furnace and
correct any problems that arise during the production process.
Metal pourers and casters tend machines that release the molten steel from the ladle at a controlled rate into
water-cooled molds, where it solidifies into semifinished shapes. This process is called "continuous casting."
These shapes are then cut to desired lengths as they emerge from the caster. During this process, operators monitor the
flow of raw steel and the supply of water to the mold.
The "rolling" method is used to shape most steel processed in steel mills. In this method, hot steel is
squeezed between two cylinders, or "rollers," which flatten or shape the steel. Rolling machine operators
operate the rolling mills that produce the finished product; the quality of the product and the speed at which the
work is completed depend on the operator’s skills. Placing the steel and positioning the rollers are very important,
for they control the product’s final shape. Improperly adjusted equipment may damage the rolling mill or gears.
Extruding and drawing machine operators control equipment that extrudes, or draws, metal materials into
tubes, rods, hoses, wire, bars or structural shapes. Cutting, punching, and press machine operators operate
machines that saw, cut, shear, slit, punch, crimp, notch, bend or straighten metal. Welding, soldering and
brazing workers join metal components or fill holes, indentations or seams of fabricated metal products.
Multiple machine tool operators are skilled in the operation of more than one type of cutting or forming
machine tool or robot.
Team assemblers and leaders work as part of a team responsible for assembling an entire product or component
of a product. Team assemblers can perform all tasks conducted by the team in the assembly process and rotate
through all or most of them rather than being assigned to a specific task on a permanent basis. They may participate
in making management decisions affecting the work. Machinists operate a variety of machine tools to
produce precision parts and instruments. They may fabricate and modify parts to make or repair machine tools or
maintain industrial machines. Inspectors, testers, sorters, samplers and weighers check parts or
products for defects, wear and deviations from specifications.
Millwrights are employed to install and maintain much of the sophisticated machinery in steel mills.
As the technology becomes more advanced, they work more closely with electricians, who help repair and install
electrical equipment such as computer controls for machine tools.
Engineers, chemists, and computer specialists are playing an increasing role at steel mills, helping to address a
variety of issues. Industrial engineers make plants more productive and energy efficient by designing
and installing the latest technology. Mechanical engineers often are found in supervisory or management
jobs, helping to solve mechanical problems on the production line. Environmental engineers design
environmental control systems to maintain water and air quality standards or to clean up old sites. Metallurgical
engineers work with the metals and ores that go into steel in order to change or improve its properties or to find
new applications for steel.
Additionally, as with most companies, there are accountants, sales agents, various managers and administrative
and clerical workers who run the company and process paperwork.
TRAINING AND ADVANCEMENT
Many jobs in steel manufacturing require only a high school diploma. However, machinery continues to become more
complex and growing numbers of operating and maintenance positions are highly skilled, so employers increasingly
prefer to hire graduates from formal postsecondary technical and trade schools. Two-year degrees in mechanical or
electrical technology or 2- to 4-year apprenticeships are recommended for persons seeking to advance into the best
production jobs.
After production workers are hired, they receive specific training on the job. New workers entering the production
process as lower skilled operators and maintenance personnel generally assist more experienced workers, beginning
with relatively simple tasks. As workers acquire experience, they specialize in a particular process and acquire
greater skill in that area. The time required to become a skilled worker depends upon individual abilities, acquired
skills and available job openings. It generally takes at least 2 to 5 years, and sometimes longer, to advance to a
skilled position. At times, workers change their specialization to increase their opportunities for advancement.
Workers are continuously trained to perform a variety of tasks and provide more flexibility to the firm, as company
needs change. Computers have become important, as companies have modernized. Workers must learn to operate computers
and other advanced equipment.
To work as an engineer or scientist, or in some other technical occupations in the steel industry, a college
education is necessary. Many workers in administrative and managerial occupations have degrees in business or
possess a combination of technical and business degrees. A master’s degree may give an applicant an advantage
in getting hired or help an employee advance. Managers need strong problem-solving, planning and supervisory
skills.
EARNINGS
Earnings in the steel industry vary by type of production and occupation but are higher than average earnings
in private industry. Average weekly earnings of non-supervisory production workers in 2002 were $968 in iron
and steel mills, and $687 in establishments making steel products from purchased steel, compared with $619 in
all manufacturing and $506 throughout private industry.
Union membership, geographic location and plant size affect earnings and benefits of workers. In most firms,
earnings or bonuses are linked to output. Workers receive standard benefits, including health insurance, paid
vacation and pension plans.
The iron and steel industry traditionally has been highly unionized. In 2002, 37 percent of workers in steel
manufacturing were members of unions or covered by union contracts, compared with 16 percent in manufacturing
and 15 percent in all industries. In some instances, companies are closed shops—that is, workers must belong
to the union in order to work there. EAFs, though, typically are nonunion. The overall decline of employment
in traditional integrated steel mills, together with the growth of EAFs, have caused union membership to
decline in recent years.
OUTLOOK
Employment in the steel industry is expected to decline 20 percent over the 2002-12 period, primarily due to
increasing consolidation in the industry as companies go out of business or are bought by other companies in
the industry and their operations merge. A worldwide glut of steel and production overcapacity domestically,
unless checked, will cause prices to decline to unprofitable levels and require mills to either become more
productive or go out of business. As mills either consolidate or close, the result will be fewer workers, but
a more productive industry that will be better able to meet foreign competition.
EAF mills, with their leaner workforce and lower cost structure, are expected to benefit from the industry’s
transformation and will continue to gain market share. They now produce nearly 50 percent of the country’s steel,
up from 25 percent two decades ago. They are also attempting to improve the quality of the steel they make by
melting pig iron along with the scrap. In this way, they can more effectively compete with integrated mills in
markets that demand higher quality steel. Thus, as EAFs continue to grow in relation to integrated mills, job
opportunities will be better at these mills.
Automation, computerization and changes in business practices that have led to a leaner workforce have reduced
the number of man-hours needed to produce a ton of steel and raised productivity enormously in the last few
decades. These productivity improvements, which were a leading cause of employment declines in the past, are
not expected to be as powerful a factor in the future, as some companies have automated the process as much as
they can. Technological improvements, however, will continue to be made, impacting the number and type of workers
hired. Low-skilled jobs will continue to be automated and the jobs that remain will require more education and
training.
Employment in the steel industry varies with overall economic conditions and the demand for goods produced
with steel. For example, as the automotive industry produces more cars and light trucks, it will purchase more
steel. In this way, much of the demand for steel is derived from the demand for other products. Other industries
that are significant users of steel include manufacturers of structural metal products, motor vehicle parts and
equipment and household appliances. As many of these goods require a large outlay, consumers are more likely to
purchase them in good economic times.
Despite the projected decline, job openings are expected to be very good or favorable for a number of occupations.
Demand for all types of engineers, including mechanical, metallurgical, industrial, electrical and civil, is
expected to be very good. Companies report great difficulty in hiring these highly skilled professionals. Also,
computer scientists and business majors should be in great demand. For skilled production jobs, workers with
associate degrees in technology will be highly sought after to operate computer-controlled machines and to repair
equipment. Among persons without postsecondary training, those who have good math and computer skills will have
better opportunities to be hired and trained for skilled production jobs. Those without a degree must be flexible
and willing to go through extensive classroom and on-the-job training. Keen competition can be expected for low-
skilled material handling and machine operator jobs, for which employment is expected to decline. Despite the
declines in employment, many workers will need to be hired to replace those who leave the industry or retire.
Especially at the integrated mills, a large number of workers is expected to retire over the next decade.
Industry data is republished with permission by the Bureau of Labor Statistics