Autos drive steel mills into black

August 13, 1994|By Bloomberg Business News

WASHINGTON -- Steel shipments by U.S. steel mills in the first half of 1994 rose to their highest level in 13 years, paced by prolific demand from automakers, an industry group reported yesterday.

Shipments in the period jumped 5.8 percent to 46.9 million tons from 44.3 million tons a year ago, making it the highest six-month total since 1981, the American Iron and Steel Institute said in its monthly report.

The yearlong boom in demand for steel, which many analysts say could last through 1996, continued in June, AISI said.

June steel shipments increased 7 percent to 8.3 million tons from 7.8 million tons in the same month last year.

After years of steep losses and layoffs, the American steel industry has come back strong in 1994, parlaying resurgent demand and price increases into profits. Most steelmakers are producing at or near capacity in a year that most analysts have described as the best economic climate for steel in two decades.

Demand is so strong that some producers are rationing steel, giving their largest customers priority, analysts say. A number of steelmakers, such as Bethlehem Steel Corp., are purchasing copious amounts of imported semi-finished steel to meet the demand and fill production gaps created by scheduled blast furnace repairs or capital projects.

Bethlehem's Sparrows Point Division in Baltimore County has been importing semi-finished steel to help supply its Burns Harbor, Ind., mill, where the blast furnace is undergoing refurbishing.

Heavy demand from automakers continues to drive the steel industry, AISI said yesterday.

In the first half of 1994, steel shipments to the automotive industry soared 17.1 percent from the same period last year.

Six-month shipments to the construction industry rose 7.8 percent; shipments for machinery, industrial equipment and tools were up 7.4 percent and shipments to makers of appliances and cutlery rose 5.4 percent, AISI said.

Analysts and industry executives have been saying for months that U.S. steel shipments would exceed 90 million tons this year. In 1993, U.S. steel mills shipped 89 million tons.

Virtually every major American steelmaker made money in the second quarter, including the five-largest producers: USX-U.S. Steel Group, Bethlehem, LTV Corp., National Steel Corp. and Inland Steel.

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