> Those “integrated” steelmakers soon lagged behind so-called “mini-mills,” nonunion competitors that use more efficient electric arc furnaces to turn old steel scrap from discarded cars and other products into new steel products

This means "chinese" mini mills^1 which require a lot of manual labor to collect the steel. This is not a technology problem, but a manpower/safety race to the bottom, that the US couldn't effectively participate in. Unions may have prevented useful compromises, granted.

New technology was not a priority, because it wouldn't help the situation. It's not like steel makers stopped doing cost/benefit analyses for decades.

A Japanese owner looks like a strategic political move, given Japan's place in the world theater. The tariffs against steel were removed for the US and Japan at the same time circa 2022. Coincidence?

^1 https://www.reuters.com/article/us-china-steel-overcapacity-...

The Reuters article is just a history of Chinese steel production. It doesn't support anything you said. According to the CNN article, Nucor, an American non-unionized American company, is successfully utilizing mini-mills.

> One pioneer of this mini-mill technology, Charlotte-based Nucor has a market capitalization of $42.5 billion compared to US Steel’s value of just over $14 billion as set by this deal.

> Nucor is also the largest steelmaker in America by output, making an estimated 20.6 million metric tons of steel per year, ranking 16th largest in the world. That compares to 14.49 million metric tons from US Steel, including its operations in Europe, which rank 27th in the world for 2022, according to the World Steel Association.

>> It doesn't support anything you said

> What China could not achieve by Stalinist state planning or Maoist revolutionary enthusiasm, it achieved by letting a million private-sector smelters bloom.

Good luck with whatever.

Smelting typically refers to extracting metal from ore.

Most chinese workers (and foreigners working in China) are in a union, however run by the communist party.

These are differently structured and run than unions outside of China. There's little recourse for protest and negotiation through them.

Oh I know. But it’s technically called a union, at least. They also funnel the morale budget through it for some strange reason, so the free movie tickets now come from the Union rather than just your employer as before.

Of what value is a union in China? I have seen some of the most deplorable safety tandards that don't even dream of OSHA-tier compliance.

The value of a union in China is profit for the owner of the company and control of worker organization. Going outside the ACFTU worker organization is illegal and punishable.

Ahh so still a holdover from the Soviet system, in a way?

The glaring issue I see is that if "integrated" mills start shutting down, where will the old steel scrap for the mini-mills eventually come from?

Someone somewhere has to be making new steel.

Or if demand for steel increases

Don't worry middle-class and below in the future will: not be able to buy cars, not able to use fossil fuel in any way, very limited in what steel products they can buy.

From a quick search, China have some integrated Mills. This one is operated in Taiwan: https://en.m.wikipedia.org/wiki/China_Steel

Short Answer : New steel is coming from overseas.

I think regions / steel industries in the region go through phases. I can draw upon my experience with one of the biggest steel manufacturers in India and Europe. SE Asia is going through a phase where most of the steel consumption is met by primary steel, new steel made from blast furnaces consuming iron ore. A lot of that steel is exported but there is a very big domestic market.

The need for secondary steel (made from old steel scraps) will become important in the future for SE Asia. Back in the US, this is already the case.

Primary and Secondary steel have different properties. Secondary steel can not be used for some applications, they can only use Primary. Vice versa, using primary steel for some applications might not be economically feasible for some applications.

I’m often amazed at the giant steel structures and vehicles that sit decaying along the side of highways for decades.

Whether it’s a case of nobody knows who owns them, regulatory hurdles, economics of breaking it down, or some other reason, I’ve often wondered why something like entire trains can just sit collecting graffiti after a railroad shuts down.

Does anyone have any insight? Is there not an abundance of material that’s recoverable low hanging fruit compared to creating new? Or is the metal recovered not as useful for chemical/physical reasons?

The costs of recovery and recycling outweigh the value of materials.

Where it's borderline, someone owns it and if you steal it you might get found out eventually.

Where it's very profitable, it gets stolen and reprocessed unless guarded (see: copper).

See https://chitransit.org/topic/4239-ex-cnw-pullman-rta-cars-in... for an example.

Not unions solely, but as other commenters have pointed out, the cost of labor more generally is what did it.

And the comparative cost of labor in e.g. China vs. US is driven by the balance of trade. Expensive labor is the price the US pays to run a trade deficit

Maybe they did and maybe they didn't. Nice example of biased journalism though, suggesting an association but providing no evidence for it.

The question is... who's going to smelt iron ore?

In fact I think it was the head of US Steel, who put it succinctly several years ago: Somebody has to turn iron ore into iron.

A huge amount of global iron ore comes from Australia. [0,1]

And globally in descending reserves order: Australia, Brazil, Russia. China's extraction:reserves ratio is much higher and will exhaust reserves much quicker than the others.

So it'd make more sense to smelt it close, given the volume/weight ratio of ore to refined material.

Transport by sea... but that's still A LOT of tonnage to move ore.

[0] https://www.statista.com/statistics/267381/world-reserves-of...

[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_iron_or...

Isn't that one of the case studies in the Innovator's Dilema? I don't remember any mention of unions in that.

>So the question is... did unions prevent a path to upgradation to new tech?

Of course they did. It's even worse in legacy auto, Engineering has to get approval from the union for any significant new vehicle features.

That is some realy bold claim, any sources for that?

probably bc there are safety and other concerns that need to be addressed? management gets to check that off why not the people building it?

" other concerns " doing a lot of work there. What other concerns?

Is "how many people get employed, and at what salaries" one of them?

Quite possibly, especially if skills from old method aren't easily transferrable to the newer methods. There could also be issues with capital concerns, both finance and tax related. Perhaps a combination of all of them.

It's not exactly unheard of. One feature that makes unions in the United States different from other countries is that they tend to have a more adversarial relationship with employers and the government. Sectoral bargaining is very rare, if it exists at all. Union laws are a patchwork of left- and right-wing administrations' attempts to undermine each other. American culture, in particular the prominence of Manichaean narratives, may play a role in making different groups see each other as "evil" and willing to do underhanded things, whether it's the UFCW planting an ABC news story about Food Lion or Amazon ignoring labor laws to fire unionizing workers. The teacher's union and police union serve as bogeymen for one or the other political party. Advocating compromise is often met with scorn.

And none of what you said has anything to do with US Steel, so your point is?

Yes, absolutely.

[citation needed]

Seriously? What citation is needed? The unions are why they didn’t switch to a less labor-intensive process. How is that a controversial statement?

Electric arc furnaces don't necessarily reduce union labor needs. They reduce the amount of energy needed and reduce the carbon emitted and are simpler to operate (yes, fewer people). But the newfound flexibility and utilization that they provide generally increases the number of union laborers the steel mill employs.

The IBEW brings union workers in from multiple states and puts them up in temporary housing just to build these things as fast as possible. Everybody wants them, they are just so incredibly expensive at the size that US Steel needs.

it's not controversial. you just didn't prove it. you said "yes, absolutely" as if it's universal truth, without any evidence.

A comment above yours says that these scrap-processing mini-mills are more labor-intensive to operate, which is why most of them are in China. So... yes, seriously, a citation is needed for your claim.

Yes seriously. You backed up your answer with nothing.

Because the Nordic labor market is dominated by unions and is considered highly competitive on the global stage?

Or because to believe that propaganda as a "universal truth" it would mean unions are not self-interested entities (unlike businesses and people).

It's been a few decades but I worked for USS as a developer, after attaining a computer science degree.

I know it's a tired old adage that labor / labor unions was the reason for American steel manufacturing decline and rise of Japanese dominance. But from the inside, that simply wasn't so -- it was more a case that Japanese mills not only more modern but the entire manufacturing process, from casting to finished product, was more efficient. Even when new US mills gained new technology, it wasn't thought through and decisions seemed to be made the basis of old boy network than solid business acumen.

But weren’t the unions also against changing the process?

No.

These factors that I'm speaking of were more along the lines of:

- a slab caster implemented, but there is already a bloom caster and only one crane facility to support both so both ran at less than optimal throughput.

- choosing to prioritize far less profitable slab casting for output to a joint venture plant in CA than very profitable bloom casting (& union definitely not in favor of this)

- buying coke at 10X price they could get elsewhere because old buddy favoritism

Basically, the Japanese firms were built a much more holistic basis -- JIT engineering, so that liquid is pored, slabs created and were delivered right into finished product processing. Whereas, by contrast, in the mill I worked at, slabs would be cast, then would cool in a yard, heated & slitted, then heated again for strip mill processing (it cost quite a bit of energy to heat to 2200/2300 degrees).

I mean, my boss & I would even spitball on how much better the place would run if it was bought out and run by (at that time, late 80s / early 90s) a foreign competitor that made decisions on business sense rather than old boy political network machinations.

Basically, all about: MANAGEMENT, MANAGEMENT, MANAGEMENT.

> So the question is... did unions prevent a path to upgradation to new tech?

Not really? The difference is referred to as "primary" vs "secondary" steelmaking.

The US pumped out enormous quantities of steel from 1910-1980ish and then usage decreased as better computer models as well as plastics allowed a lot more efficient use of the material. This meant that a bunch of used steel was available and nobody could really consume steel fast anymore.

Consequently, "secondary" small mills recycling used steel were WAY more profitable than "primary" large mills making it from ore. This devastated the US steel industry which was mostly "primary" (some of that has changed).

Then ... China ... started consuming vast quantities of steel for development. At some point, China bought up and used most of the used steel that was available.

So ... today ... "secondary" steel is rising because the cheap used steel isn't laying around anymore. "Primary" steel is making a comeback as you need to produce original feedstock or the "secondary" producers have nothing to work with.

The correct answer to all this is: it's a balance. You need some primary steelmaking or you simply run out of feedstock. You need some secondary steelmaking to tweak the type of steel and provide smaller, specialty runs.