China Threatens Growing Ohio Steel Industry

COLUMBUS, Ohio, Feb. 8, 2007 -- The Ohio Steel Council's third quarter 2006 data show increases in production and shipping as compared to the same period in 2005.

Fourth quarter 2006 figures are not yet available, but they are expected to show a slight dip due to an inventory correction, which has continued into the first quarter of 2007, according to the council.

Ohio steelmakers expect orders in 2007 to pick up and the year to shape up as a good one, even while foreign steel imports remain a concern. Another point of concern is the economic health of the auto industry, as well as suppliers to the auto industry, according to the council.

"We are in the midst of an inventory correction at the distribution level, but steel consumption at the end-user level continues to be good. Overall, we expect 2007 to be a good year for steel," said Patrick G. Tatom, chairman of the council and president and chief executive officer of WCI Steel, Inc.

As the largest steel exporter to the U.S., China was on pace to ship more than 5.3 million net tons of finished steel products to the U.S. in 2006, an increase of 131 percent over 2005. Steel production in China nearly doubled between 2003 and 2006 and is outpacing domestic consumption in China and global steel production.

"In light of China's explosive growth in steel production, we are asking the Bush Administration and Congress to vigorously enforce and defend trade laws," Tatom said.

In the third quarter of 2006, steel shipments in Ohio were 3.96 million tons, up 3.27 percent over the same period in 2005. Production for the quarter was 3.82 million tons, up 9.05 percent over the same period in 2005.

In the first three quarters of 2006, shipments were 12.1 million tons, up 6.08 percent from the same period in 2005. Production was 11.5 million tons, up 7.54 percent from the same period in 2005.

Capital spending was $187.9 million in the first three quarters of 2006, a decrease of 23.4 percent over the year-ago period.

Employment for the first three quarters of 2006 averaged 14,040 -- 7.5 percent lower than the same period in 2005.

The Ohio Steel Data Report, compiled by Youngstown State University's Center for Urban Studies, covers statistics from Ohio facilities of the Council's steel-producing members. The data is forwarded to the council in aggregate, so the contribution of any single company cannot be determined. For more data and past data reports, visit www.ohiosteel.org.