In this issue, AMM is looking back at the careers of three steel industry giants whose contributions spanned the 20th Century. Some interesting statistical trends emerged over the course of that century that help tell the story of the industry.
On the raw materials side, ferrous scrap prices were around $13 per gross ton in 1908 vs. $367 last year. However, the movement in the value of scrap (using an annual average of No. 1 heavy melt delivered to consumers in Chicago, Philadelphia and Pittsburgh) looks quite different when examined in constant dollars. In 2012 dollars, No. 1 heavy melt was worth about $337 per ton in 1908.
Some of the history of the United States is reflected in the price steel mills paid for ferrous scrap. It turns out that the highest value for scrap occurred in 1917, when it reached about $506 per ton in constant 2012 dollars. This coincided with Americas entry into World War I, which increased demand for steel and the scrap required to produce it. One of the lowest points was in 1932, when--in the depths of the Great Depression--scrap dropped to about $121 per ton. Some of the consistently highest years have occurred since the Great Recession of 2007-09.
On the production side, world crude steel production totaled a record 1.5 billion tonnes last year, up 1.2 percent from 2011 and more than 5,200 percent higher than 28.3 million tonnes in 1900. To put that in some perspective, the worlds population grew 338 percent over that same time span, the U.S. population increased 312 percent and estimated global gross domestic product grew about 6,265 percent.
Last years growth in crude steel output came mainly from Asia and North America, while crude steel production in the European Union and South America fell. Crude steel production in Asia increased 2.6 percent in 2012, Chinas output rose 3.1 percent--accounting for 46.3 percent of world crude steel production vs. 45.4 percent in 2011--and production in North America was about 2.5 percent higher than in 2011.
Going back just a decade shows some dramatic changes. Between 2002 and 2012, U.S. production of crude steel output fell by about 5.6 percent; but Chinese production increased a dramatic 275 percent. In fact, Asian production of crude steel now accounts for about 64 percent of all worldwide material, up from 44 percent just 10 years ago.