Having worked in the steel industry for over 25 years – as a steelmaker and user – it’s clear to me that this industry experiences cycles. Without researching the experts and data, the down cycles appear to be about two years long and occur about every five years. This interval is affected by outside influences such as the strength of the automotive, aerospace or oil-and-gas industries. The health of companies such as TimkenSteel, highlighted in this month’s cover feature, is currently being affected by the downturn in the oil-and-gas sector.
When the industry goes into one of its cyclical downturns, the calls for protection get louder. This is probably because during low-demand times when steel is more plentiful (worldwide), it is more likely to be imported to the U.S. and other steel-using countries at low costs, which affects the in-country steelmakers. In early 2015, steel imports have captured 32% of the market, which is a historic high. In reaction to the latest cycle, new trade laws purported to save steel jobs have been enacted.