The steel industry is very important to both the American economy as well as the nation’s identity. We are a country forged in steel, and many of our largest cities have been built on the steel trade. Unfortunately, American steel corporations have not fared well over the past few decades, creating a precarious situation in our country’s manufacturing industries. The steel industry in this country needs to be strong, plain and simple.
American steel companies are facing a lot of factors that make it difficult to succeed in the business world. First and foremost, a global glut of steel caused by slowdowns in the economies of China and other expanding, wealthy nations has led to lower prices for steel. Aging mill equipment as well as growing retirement pensions are also putting a strain on many formerly strong companies.
Some business are going to fairly extreme lengths to try and buck these economic issues. One of the largest global steel providers, U.S. Steel, is replacing its entire management team completely with outsiders, a decision that has been rarely made in the company’s 112 years in business.
The corporation’s outgoing CEO, John P. Surma, oversaw a huge upswing in profits since he began his tenure in 2004, only to see share prices bottom out dramatically. In 2008, U.S. Steel stock cost a maximum of $196 per share, due largely to increased demand from China. Currently, U.S. Steel shares cost about $20, an amazing reduction in price.
Many feel that a combination of misguided decisions contributed greatly to this most recent downturn in U.S. Steel’s fortunes. These include the purchase of a Canadian tube developer and a major software initiative that many believe will cost more than it helps. Still, the company is the world’s 12th-largest steel manufacturer and a big source of hope for the American steel industry.
Florida Pipe & Steel is a small part of this fight for a better steel economy in the United States. We understand that our country depends on us in more ways than one. American steel companies must be working harder to keep ahead of global competition, and working smarter to make sure we stay that way. We will continue to sell carbon steel pipes and other products!
*Image courtesy of Aaron Amat