“We are witnessing major structural changes in the steel industry, which can be described accurately as both ‘revolutionary’ and predictable,” American Iron and Steel Institute (AISI) Chairman David S. Sutherland, President and CEO of Ipsco, Inc., testified Thursday, August 19, at a Steel Caucus field hearing in Pittsburgh.

In his report on the state of the U.S. steel industry in the global market, Sutherland cited several new forces at work, in particular China’s rapid industrialization. “Ongoing growth of China’s industrial sector and consumer demand will continue to drive global demand far into the future,” Sutherland predicted. A combination of reduced domestic supply and skyrocketing demand for steel mill products and steelmaking inputs, such as coke and steel scrap, have resulted in increasing upward pressure on the price of steel globally – not just in the U.S. and North America. In providing an overview of conditions in the U.S. market, Sutherland acknowledged that “sudden and significant changes in market conditions can be disruptive to both the steel buying and producing community.” At the same time, he pointed out that “the ability of steel producers to effectively subsidize steel-using sectors by selling below cost, in order to meet the prices of dumped and subsidized imports, was clearly not sustainable.”

In his testimony, Sutherland also thanked the Steel Caucus and the Administration for their leadership in setting “a climate, through the implementation of the Section 201 program, which facilitated dramatic changes in our industry. The historic changes in our sector reflect both new models of organization and innovative advances in technology. As a result, we look at our future — as a high-tech and global industry — with a renewed vigor.” He cautioned, however, that while U.S. steel companies continue to invest in pro-competitive innovations, unfair trade practices continue to distort the global market. Sutherland urged the government to develop a more effective, results-oriented trade policy and to continue to enforce long-standing domestic laws and international agreements that provide for free, fair and transparent trade.

“The dramatic changes to the steel market are global in scope and are based on well-established economic principles,” commented Sutherland. “Moving forward, the newly restructured and more financially stable U.S. steel industry will be a more competitive and more sustainable business partner for the American manufacturing sector and for U.S. national security.”

The Steel Caucus hearing, hosted by Senator Arlen Specter, R-Pa., featured additional steel industry representatives, including John P. Surma, United States Steel Corp.; Rodney B. Mott, International Steel Group Inc.; John W. Nolan, Steel Dynamics, Inc., representing the Steel Manufacturers Association; Jack W. Shilling, Allegheny Technologies, representing the Specialty Steel Industry of North America; Mark Magno, Wheatland Tube Co., representing the Committee on Pipe and Tube Imports; and Leo W. Gerard, United Steelworkers of America.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking technology. AISI is comprised of 31 member companies, including integrated and electric furnace steelmakers, and 118 associate and affiliate members who are suppliers to or customers of the steel industry.