April 2012 - The bits of information that can be found with a simple Google search are endless. For instance, in honor of March Madness, did you know that the University of Cincinnati’s mascot, the bearcat (or binturong) is neither a bear nor a cat? It’s a viverrine mammal native to Southeast Asia.
From the rabbit hole of YouTube, Facebook and mascot trivia to far more serious and useful items, such as commodity prices and SEC filings, information is readily available with the click of a few keys. Today, the price of steel and its various inputs also is accessible to an audience beyond commodity analysts—for better or worse.
Access to this vast sea of information is a double-edged sword. On one hand, it’s impossible to analyze every kernel of news. On the other, knowledge is power. And as steel continues to generate positive front-page news, more young people may consider a career as a steel worker or executive, securing the industry’s future.
The future of steel is important to the survival of myriad other industries, according to a report released on March 20, “Economic Impacts of the American Steel Industry,” by Timothy J. Considine, professor of energy economics at the University of Wyoming.
In a press release announcing his analysis, which was commissioned by the American Iron and Steel Institute, Considine said, “Every one job in the U.S. steel industry supports seven jobs in the U.S. economy, reflecting its ripple effect on employment.” For 2011, the report states the American steel industry directly employed 150,700 and, given the multiplier effect, supported more than 1 million jobs.
“This is one reason why so many countries around the world welcome investments that establish steel mills because they stimulate industrial supply chains,” Considine said. According to the report, for 2010, the steel industry purchased more than $20 billion of materials produced in other industries, $8 billion of machinery, $4.4 billion from wholesale and retail trades sectors and more than $4 billion of transportation services. It also generated $12.4 billion in labor income.
A direct example of the benefits that come from steel trade is an increase in shipments through U.S. ports. The Port of Mobile handled its largest import steel shipment on March 13—4,259 carbon steel slabs weighing in at 94,210.244 metric tons.
“As anticipated, our Pinto Terminal volumes are skyrocketing as the ThyssenKrupp rolling mill continues to ramp production,” said Jimmy Lyons, director and CEO for the Alabama State Port Authority, in a press release. “We’ve long known this mill and its markets would impact this port in a number of positive ways, now investments serving steel are starting to bear fruit.” The Port Authority has increased total steel volumes handled from 1.1 million tons in CY2010 to 3.6 million tons in CY2011.
Similarly, the Ports of Indiana handled 8.1 million tons of cargo in 2011, the largest annual tonnage since 2006, thanks, in part, to an increase in steel cargoes.
“Our 2011 shipments were nearly a million tons higher than the five-year average,” said Ports of Indiana CEO Rich Cooper in a statement. “We’ve also seen a significant increase in capital investments by our port companies as they prepare for future growth. This is a good sign for things to come.”
Although the future of the economy is still tentative, an uptick in confidence re-ignites companies’ passion for business. Like many of MM’s issues, this one features several companies who are expanding and adjusting strategies to meet new market needs. They’re excited about new initiatives, equipment and products. Much like the ripple effect on jobs among interconnected industries, excitement is contagious. Let’s hope it continues to build. MM
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