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Ohio Steel Producers Report First Half Results

10/04/2005 - Ohio steelmakers posted moderately strong production and shipping figures for the first half of 2005, even as the market struggled to emerge from an inventory correction that began before the end of 2004.

Ohio steelmakers posted moderately strong production and shipping figures for the first half of 2005, even as the market struggled to emerge from an inventory correction that began before the end of 2004.

Ohio steelmakers shipped 3.9 million tons in the first quarter of 2005, a 2.5% increase over the same period in 2004. Production was 3.77 million tons, up 4% from the same period in 2004.

The steelmakers shipped 3.7 million tons in the second quarter, a 3.6% decrease from the same period in 2004. Production was 3.46 million tons, a 6.35% decrease compared to the same period in 2004.

Year-to-date shipping was 7.6 million tons, a 0.58% decrease compared to the first half of 2004. Year-to-date production was 7.2 million tons, down 1.22% from the same period in 2004.

High natural gas costs resulting from Katrina, as well as other high raw material prices, will present difficult challenges for the industry through the remainder of 2005.

Year-to-date shipping was 7.6 million tons, a 0.58% decrease compared to the first half of 2004. Year-to-date production was 7.2 million tons, down 1.22% from the same period in 2004. Meanwhile, capital spending surged to $159.7 million, an increase of 43.44% over the year-ago period. Employment averaged 15,285, 0.04% lower than the same period in 2004.

Steel markets were hurt in the first half of 2005 by high inventories developed in late 2004 and sluggishness in the automotive markets. High natural gas prices and high raw material prices also undermined the financial performance of some Ohio steel companies.

"We are seeing a pick up in orders as we approach the end of the third quarter, and we expect to see that extend at least through the fourth quarter," commented William A. Brake Jr., Chairman of the Ohio Steel Council and Executive Vice President of Eastern Operations for Mittal Steel USA. “Our concern is that high natural gas prices aggravated by the Katrina disaster, as well as the cost of raw materials, such as scrap, may undercut the industry's progress forward. Otherwise, the industry is showing sustained improvement as it emerges from a period of reorganization and restructuring."

Members of the Ohio Steel Council and their employees have thus far raised more than $440,000 of aid for the Katrina relief efforts.

Compiled by Youngstown State University's Center for Urban Studies, The Ohio Steel Data Report covers statistics from Ohio facilities of the Council's steel-producing members. The data is forwarded to the Ohio Steel Council in aggregate, so the contribution of any single company cannot be determined.

The Ohio Steel Council is a public-private partnership designed to strengthen ties among the steel industry, the state of Ohio and its citizens. The Council's member organizations are

  • AK Steel Corp.
  • Lorain Tubular Operations (of U.S. Steel)
  • Mittal Steel USA
  • Ohio Department of Development
  • Ohio House of Representatives
  • Ohio Senate
  • PRO-TEC Coating Company (of U.S. Steel)
  • Republic Engineered Products Inc.
  • The Timken Co.
  • United Steelworkers of America
  • V&M STAR
  • WCI Steel, Inc.
  • Wheeling-Pittsburgh Steel Corp.