Steel executives forecast a gloomy 1991

May 23, 1991|By Kim Clark | Kim Clark,Sun Staff Correspondent

WASHINGTON ZHC RZB — WASHINGTON -- The nation's steel industry, which had rebounded from the searing losses and layoffs of the early 1980s, faces a grim year in 1991, the industry's top executives agreed yesterday.

Even if the economy rebounds soon and steelmakers return to profitability next year, the industry will likely endure further pain in the 1990s, the steelmakers said at the industry's annual gathering.

Among the warnings sounded at the American Iron and Steel Institute meeting:

*Continued declines in demand for steel will probably require additional, though slowed, plant consolidations.

*U.S. steelmakers are spending only half as much money as they should on research and improvements needed to compete with technologically advanced European and Asian mills, endangering the domestic industry's ability to compete over the long term.

But steel experts pointed to one glimmer of good news among the gloomy litanies about the weak demand for steel from carmakers, appliance factories and high-rise developers: Steel cans are making a rebound.

Not only have sales of steel can stock -- such as the thin sheets of tin-coated steel made at Bethlehem Steel Corp.'s Sparrows Point yard -- stabilized at 4.1 million tons a year, but steelmakers are actually increasing their market share in the huge and growing soda pop and beer can markets.

Steel, which had lost about 98 percent of the beverage market to aluminum by the late 1980s, is starting to inch its way back and now makes up more than 3 percent of the 126 billion beverage cans shipped each year, said David C. Jeanes, an American Iron and Steel Institute spokesman.

It's a small step, but it is important to plants such as Sparrows Point, said Duane Dunham, Bethlehem's vice president for marketing.

Sparrows Point, with about 6,700 employees, is the only place Bethlehem makes steel can stock. And can stock makes up as much as 25 percent of the Baltimore plant's production, Mr. Dunham said.

Even during the recession, Bethlehem has seen increased sales of steel can stock to buyers ranging from Campbell's Soup can-makers to Pepsi bottlers, Mr. Dunham said.

But in most other important markets for steel, "the shipments are the lowest they have been for years," said Frank Luerssen, chairman of Inland Steel Industries Inc.

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