Steel is one of the basic building blocks of the modern world. Automobiles, appliances, bridges, oil pipelines, and buildings, are all made with steel. While steel manufacturing has existed for centuries, the process for making steel continues to evolve.
Goods and services. 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, beams, 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 and chemical reactions 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. While EAFs are sometimes small, some are large enough to produce 400 tons of steel at a time. The growth of EAFs has been driven by the technology’s smaller initial capital investment and lower operating costs. 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 well over half of American steel production and their share is expected to continue to grow in coming years as they move to produce more higher end products by adding virgin iron ore to the mix of steel scrap and other additives.
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 the production process is more complicated and consumes more energy, it is more costly.
Industry organization. The steel industry consists of EAFs and integrated mills that produce iron and steel from scrap or molten metal. Most of these mills also have finishing mills on site that convert iron and steel into both finished and unfinished products. Some of the goods produced in finishing mills are steel wire, pipe, bars, rods, and sheets. While wire, steel reinforcing bars, and pipes are considered finished products, rolled steel is unfinished, meaning it is normally shipped to companies, such as automotive plants, that stamp, shape, and machine the rolled steel into car parts. In these finishing mills, products also may be coated with chemicals, paints, or other metals that give the steel desired characteristics for various industries and consumers.
Finished products also are manufactured by other companies in this industry that make pipe and tubing, plate, strip, rod, bar, and wire from purchased steel. Competition from all these mills has resulted in increasing specialization of steel production, as various mills attempt to capture different niches in the market.
Also included in the steel manufacturing industry 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.
Recent developments. Steel manufacturing is an intensely competitive global industry. By continually improving its manufacturing processes and consolidating businesses, the U.S. steel industry has increased productivity sufficiently to remain competitive in the global market for steel. Investment in modern equipment and worker training has transformed the 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. Over the past 25-30 years, steel producers have, in some cases, reduced the number of work-hours required to produce a ton of steel by 90 percent.
To achieve these productivity improvements as well as product improvements, steel mills employ some of the most sophisticated technology available. Computers have been essential to many of these advancements, from production scheduling and machine control to metallurgical analysis. For workers, modernization of integrated, EAF, and finishing mills often has meant learning new skills to operate sophisticated equipment.
With these changes has come a growing emphasis on flexibility and adaptability for both workers and production technology. As strong 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.
Hours. 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 44.6 hours per week in 2006 in iron and steel mills and 43.7 hours in steel product manufacturing; only about 2 percent of workers are employed part time. Workers usually 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.
Work environment. 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. Many key tasks are now performed by machines that are controlled by workers sitting in air-conditioned pulpits supervising the production process through windows and by monitoring banks of computer screens.
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.
The rates of occupational injury and illness per 100 full-time workers in 2006 were 5.4 in iron and steel mills and 8.8 in steel product manufacturing, higher than the rate of 4.4 per 100 workers for the entire private sector. The rate for all of manufacturing was 6.0 per 100.
The steel industry provided about 154,000 wage and salary jobs in 2006. Employment in the steel industry is broken into two major sectors: iron and steel mills and ferroalloy production, which employed 94,000 workers; and steel products from purchased steel, which employed 60,000 workers. 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 43 percent of 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. Although most steel mills are small, about 80 percent of the jobs in 2006 were in establishments employing at least 100 workers.
Although the steel making process varies with the type of furnace used, the jobs associated with the various processes are similar. By a large margin, production occupations, transportation and material moving occupations, and installation, maintenance and repair occupations make up the majority of jobs in steel mills. In addition, significant numbers of engineers and managers 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.
Material-moving and production occupations. At integrated mills, production begins when material-moving workers use robots and cranes to 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, use automated and computer controls to manage 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 oversee 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. This process is repeated through a series of rollers until the steel reaches the desired thickness. 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 run 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.
Other occupations. Millwrights and industrial machinery mechanics are employed to install and maintain much of the sophisticated machinery in steel mills. They are expected to have a range of skills, including welding and machining. 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. 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. They make adjustments to the steel-making process in response to quality control issues. Industrial engineers work in process control and use computer models to design production processes to maximize efficient production of each job. They also work with engineers from other specialties to 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.
Additionally, as with most companies, there are accountants, sales agents, various managers, and administrative and clerical workers who perform company administrative tasks and market the product.
As the technology that runs many of the steel and finishing mills becomes more complicated, the skill levels needed to operate these plants has grown. While some entry-level workers need only a high school diploma, further education is usually required to obtain the more skilled maintenance and production jobs.
Material moving, production, and maintenance and repair occupations. Many workers enter the steel manufacturing industry as material-moving workers. Material moving workers usually need to have a high school diploma and a driver’s license, and pass a drug test. While they are expected to show some mechanical aptitude, experience is not normally required. After workers are hired, they receive on-the-job training. After a year, the best workers may be promoted to lesser skilled machine operator positions.
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. Increasingly, workers are trained to perform a variety of tasks to provide more flexibility to the firm as company needs change. As computers have become more important, workers must learn to operate computers and other advanced equipment to get ahead.
As just stated, an employee can work his way up from an entry-level position to become a skilled operator and repairer through a mixture of on-the-job training and some classroom instruction. However, as machinery continues to become more complex, and as growing numbers of operating and maintenance positions are highly skilled, employers increasingly prefer to hire graduates from formal postsecondary technical and trade schools. Two-year degrees in mechanical or electrical technology, similar military experience, or 2- to 4-year apprenticeships will make a worker more competitive when seeking the best production and maintenance jobs.
Professional and managerial occupations. To work as an engineer or scientist, or in some other technical occupations in the steel industry, a college education is necessary and some positions require an advanced degree. 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.
Job opportunities should be very good for engineers and skilled production and maintenance workers despite a projected decline in employment over the 2006-2016 period.
Employment change. Employment in the steel industry is expected to decline 25 percent over the 2006-16 period, primarily due to increasing consolidation, improvements in productivity, and strong foreign competition. Automation, computerization, and changes in business practices that have led to a leaner workforce have reduced the number of work-hours needed to produce a ton of steel and raised productivity substantially 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, affecting 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.
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 more than 50 percent of the country’s steel, up from 25 percent two decades ago. They are improving 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.
Employment in the steel industry varies with overall economic conditions and the demand for goods produced with steel. Much of the demand for steel is derived from the demand for products that consume large amounts of steel. Industries that are significant users of steel include manufacturers of structural metal products used in construction, motor vehicle parts and equipment—a typical car uses about a ton of steel—and household appliances. Many of these goods are expensive so the consuming public is less likely to purchase them during economic downturns.
Currently, strong economic growth in some developing countries is driving up both the global demand for and price of steel. These developing countries use large amounts of steel in the construction of buildings, bridges, and other infrastructure. In addition, as these countries grow wealthier, their citizens are purchasing more automobiles, appliances, and other steel products. If the economic growth of developing countries continues, they will greatly affect the worldwide demand and production of steel.
Job prospects. Despite the projected decline in the number of jobs in the industry, job opportunities are expected to be very good for a number of occupations. Demand is expected to be excellent for all types of engineers, including mechanical, metallurgical, industrial, electrical, and civil. Companies report great difficulty in hiring these highly skilled professionals. Also, computer scientists and business majors should be in great demand.
For skilled production and maintenance jobs, workers with associate degrees in technology or equivalent training will also have very good job opportunities as there is a great need for people 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. A large number of workers are expected to retire over the next decade.
Industry earnings. Earnings in the steel industry vary by type of production and occupation but are higher than average earnings in private industry as a whole. Average weekly earnings of nonsupervisory production workers in 2006 were $1091 in iron and steel mills, and $775 in establishments making steel products from purchased steel, compared with $691 in all manufacturing and $568 throughout private industry. Earnings in selected occupations in steel manufacturing appear in table 2.
Benefits and union membership. Union membership, geographic location, and plant size affect earnings and benefits of workers. In most firms, earnings or bonuses are linked to output. Workers generally receive standard benefits, including health insurance, paid vacation and sick leave, and pension plans.
The iron and steel industry traditionally has been highly unionized, but that has changed. In 2006, only 26 percent of the workers in steel manufacturing were members of unions or covered by union contracts, compared with 12 percent in all manufacturing and in all industries. In some instances, companies are closed shops—that is, workers must belong to the union in order to work there. EAFs are less frequently unionized than integrated mills. The overall decline in employment in traditional integrated steel mills, together with the growth of EAFs, has caused union membership to decline in recent years.
For additional information about employers and training in the steel industry, contact:
Information on the following occupations may be found in the 2008-09 Occupational Outlook Handbook:
Suggested citation: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 Edition, Steel Manufacturing, on the Internet at http://www.bls.gov/oco/cg/cgs014.htm (visited June 03, 2009 ).
Last Modified Date: March 12, 2008
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