Final Draft EnSys Energy & Systems, Inc. and light products. The coke is saleable against coal and the incremental light products back out crude oil but the economics are all based on the coke (coal) price. This finding may well have some realism behind it and should be further investigated. In the limited time available, detailed impacts on crude and product flows, refinery operations, electricity consumption etc. were not extracted from the WORLD model cases. In addition, a projected run to illustrate the potential effects of increasing bunker fuel costs was not undertaken. From past experience, however, this would have had the effect of boosting regional refinery investments and GHG emissions while curtailing interregional crude and product movements and bunker fuel GHG emissions. These and other quantitative effects and tradeoffs can be readily extracted from further WORLD model cases. Ideally however such cases should use latest EIA projections. The current cases are valuable in their indications but should be regarded as preliminary. 46-495-38 THE STEEL INDUSTRY: PERSPECTIVE The steelmaking process begins with the conversion of iron ore to molten iron in the blast furnace; the molten iron and streel scrap are refined in the basic oxygen furnace to form steel, which is subsequently solidified and converted into basic products such as plates, sheets, bars, rods, pipe, and tubes. Alternatively, steel may be made in an electric arc furnace by melting scrap iron and steel. The value of blast furnace and basic steel products shipments in 1994 was $69.7 billion, or 2.1 percent of the manufacturing total of $3.3 trillion. From 1992 to 1995, this industry, which constitutes 1.5 percent of consumption expenditures and 1 percent of gross domestic product, experienced an average growth rate of 5.2 percent, compared to the all-industry average of 4.2 percent. The industry sector for blast furnaces and steel mills is fairly concentrated, with the eight largest companies accounting for 58 percent of the value of shipments. Compared to the manufacturing average of 12 thousand British thermal units (btus) of energy used per dollar of value added, the steel industry is among the most energy-intensive of the major industries, using 108.1 thousand btus per dollar of blast furnace and steel mill output. While coal and coke are still the predominant fuels, the utilization of natural gas and electricity is increasing as electric arc furnace-based production replaces basic oxygen furnace-based production. International Trade The steel industry is a large net importer. In 1995, imports of steel were $12.9 billion (or 1.7 percent of the total of $749.4 billion), while exports were $4.85 billion (or 0.8 percent of the total of $575.9 billion). Imports to the U.S. now come primarily from Japan, Canada, Russia, and Germany and exports generally go to Canada, Mexico, China, and the United Kingdom. It is estimated that approximately one-fourth of the steel firms in the U.S. are foreign-owned. Investment and Employment New capital expenditures for blast furnaces and basic steel production were just under $3.2 billion in 1994, or 2.8 percent of all new capital investment for the manufacturing sectors. Of this total, $2.9 billion was for machinery and equipment and $0.2 billion for buildings and structures. About $0.2 billion was spent on used capital, almost all of which was for machinery and equipment. Of the total of approximately 123 million civilians employed in the U.S. in 1994, 18.3 million were employed in manufacturing. A total of 225,700 were employed in blast furnaces and basic steel products, with 174,700 of that total employed as production workers. Major restructuring in the 1980s resulted in a 60 percent decline in U.S. steel employment. ST-4 |