NEW YORK — Steel mills in the United States might struggle to fulfill new demand for domestically produced material despite having capacity to spare because they are unable to hire enough qualified people, according to market participants and recruiters.
President Donald Trump's Section 232 orders have stimulated demand for US-made steel and enhanced confidence in the industry's outlook. The onshore producers' thirst for expansion has them all scrambling for steelworkers at the same time. They are not finding enough to go around.
Domestic mills "are hiring like crazy, maybe 1,000 people in six months, and they'll need another 1,000," according to Gary Fruchtman, a specialist in steel industry recruitment searches and managing partner of WorldBridge Partners in Toledo, Ohio. When mills are adding entire shifts of employees, they need qualified technicians, electricians, engineers and line supervisors who know how to run a melt shop, caster or rolling mill - plus the corporate staff and decision makers to support their work.
The recruitment struggles have slowed some output expansion plans, he said.
"We have absolutely been delayed with several requests," Fruchtman told American Metal Market. "Some of the projects have had to be moved into the future a little bit, and that is most likely based on not being able to find the right team."
The hiring squeeze is particularly acute in the tubular sector, where import volumes have represented a higher market share in recent years and domestic capacity utilization rate slipped below other segments. The Section 232 tariffs and quotas have stifled the supply of imported oil country tubular goods (OCTG) and line pipe at a time when oil and gas drilling is on the upswing. Seamless and electric-resistance welded mills are eager to fill the gap but they can't hire fast enough.
Steel suppliers in Texas are competing for some of the same workers who have been snapped up by oil producers and pipeline operators, both of whom are enjoying the Trump administration's regulatory and tax policies and a stimulative $70-per-barrel West Texas Intermediate crude oil price.
Energy-tubular distributors are already hearing from mills that the domestic supply buildup is coming slower then expected, fueling forecasts that available OCTG inventories might dwindle to historic and uncomfortable lows later this year. The hiring challenges could even push OCTG prices beyond the multiyear highs that they have already attained.
American Metal Market's pricing assessment for US domestic seamless P110 casing was at $1,700-1,800 per ton fob mill on Tuesday June 26, up 31.3% from $1,265-1,400 per ton at the start of this year.
In some ways, steel producers might view the labor shortage as a high-class problem brought about by other developments related to Trump's policies that have encouraged domestic sourcing and private-sector growth in energy production, construction and manufacturing. But a separate Trump stance - an apparent desire to curb immigration - is seen as deepening and prolonging the lack of available workers, and acts as a drag on the ability of governments to commit to large public infrastructure projects.
The steel industry's job recruitment announcements are almost too numerous to track. Fruchtman guided a reporter through a few keyword searches on Indeed.com and found more than 800 steelmaking-related job openings. At least 324 were from Charlotte, North Carolina-based Nucor Corp and about 200 from Pittsburgh-based U.S. Steel Corp. Last month, Luxembourg-based Tenaris said it intended to hire more than 250 new workers at tubular operations in Texas.
Benteler Steel/Tube will hold a career fair in Shreveport, Louisiana, on July 13-14,with the intention of hiring 75 employees due to its expanding hot-rolling mill activity. Job openings at Benteler include engineering, electrical, metallurgy, process control, automation, millwright, heat treat, maintenance and quality assurance specialties, plus lathe operators. The company has set up an elaborate recruitment website, bentelerjobsinlouisiana.com, featuring several videos to highlight the growth plans, describe the skills needed, sing the praises of life in the greater Shreveport area and invite online applicants.
Steel mills are notorious for poaching talent from competing mills but that approach is totally insufficient at the moment and good people are not as eager to jump ship in current conditions, Fruchtman said.
"Nobody is in fear of losing their job right now, and demographically more people are leaving the steel business than are coming in," he said. The mills "are doing a good job of recruiting people out of the schools and they are open minded about hiring less experienced people, but you still need experienced people who know how to make steel."
One semi-retired manager in his late-60s told American Metal Market that he has been "politely" asked to return to a full-time schedule again, "not exactly voluntarily," further demonstrating tight availability of qualified successors to the current generation of steel leadership preparing for retirement.
Another hurdle to attracting new employees is pre-employment drug screening, according to one tube mill source.
"If we interview 10 people and they find out there's a drug test we get maybe six call us back, and then we're lucky if we can hire three of them," the mill source said.
The current recruitment challenges have caused mills to do some soul-searching about company culture, social responsibility and generally how they nurture their team members, according to Fruchtman. Some companies might regret the reputation they earned from how they treated their work force during leaner years, when they didn't need to put their best foot forward to convince skilled people to join.