Canada’s steel industry: High-value cornerstone of our manufacturing economy – by Ken Neumann and Marty Warren (Hamilton Spectator – December 9, 2015)

Ken Neumann is the United Steelworkers National Director. Marty Warren is the United Steelworkers District Director for Ontario and Atlantic Canada.

With a perfect storm threatening Canada’s steel industry, many concerned Canadians are asking, “Will steel manufacturing still play a key role in our future economy?” Well, the answer can — and should — be: “yes.” To understand why and how, let’s look at the facts.

The livelihoods of tens of thousands of Canadian workers and pensioners are at risk and so are the communities that depend on the steel industry for jobs and economic activity. The current crisis is caused by low world steel prices, a sluggish oil and gas sector and dumping of subsidized steel from China and other jurisdictions with poor environmental, safety and working standards.

Like oil and gas, demand and prices for steel are very cyclical. Fifteen years ago, steel dropped to levels similar to today’s depressed prices — below $400 a ton for hot-rolled band steel — then rebounded dramatically. The financial meltdown of 2008 brought another plunge, but by 2011 the price of steel was up to $800 a ton.

Smart industry executives know that ultimately the supply and demand for steel will rebalance, the oil sector will pick up again and prices for standard and high-end steel will ultimately rebound.

In the meantime we have to work to preserve the industry. Canadian steelmaking is directly responsible for 20,000 jobs, with a payroll injection of $1.7 billion, as well as another 100,000 indirect jobs. The industry also purchases $9.3 billion annually in goods and services, supporting over 5,000 suppliers. That’s a lot of Canadian families and suppliers in a lot of Canadian communities.

Canada’s steel industry is a highly advanced, technically skilled, value-added, state-of-the-art sector. It produces some of the highest grades of steel products anywhere. But in the current crisis, even sophisticated operations are now under creditor protection as a result of the current crisis.

U.S. Steel Canada in Hamilton and Nanticoke, Ont., is under creditor protection and it operates North America’s newest Greenfield integrated steelmaking facility and has one of the most advanced zinc-coating facilities in North America. Essar Steel Algoma in Sault Ste. Marie is under creditor protection too and it has one of the most-advanced thin slab casting and rolling mills in North America.

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