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A Look into Alabama’s
Iron and Steel Industry
Brief Industry Overview
The iron and steel industry operates in a highly
cyclical and competitive environment, with
demand dependent on both global and national
economies. Iron and steel mills comprise
integrated producers that manufacture or buy
pig iron for processing in a basic oxygen
furnace and mini-mills which convert scrap
metal in an electric arc furnace (EAF).
Foundries make metal mold or die castings from
molten metal which are then subject to further
manufacturing. Capital requirements are very
high in the integrated mills and all mills are
greatly affected by commodity prices.
Technology has improved product quality and
enabled U.S. producers to cut the number of
man-hours required to produce a ton of steel
by as much as 90 percent over the last 25 to
30 years. Environmental regulations are also a
major focus and cost.
Alabama’s Steel Industry
Industry beginnings. The iron and steel
industry has a storied history in Alabama.
With ample supplies of iron ore, coal, and
limestone, north Alabama, particularly the
Birmingham area, was well-positioned to be a
center for iron and steel manufacturing. The
industry began to flourish around Birmingham
in the late 1800s, with southern investors and
northern bankers coming together to finance
the large capital investments required, while
northern and midwestern engineers provided
technological expertise. The largest blast
furnace complexes were owned by the
Tennessee Coal, Iron, and Railroad Company
and the Sloss-Sheffield Steel
Alabama Iron and Steel Industry 2006
and Iron Company. Industry
development brought new rail
Business sales
lines to Birmingham and
Employment
(millions)
enabled the rapid post-Civil
Iron and Steel Mills
4,760
$1,390
War growth that earned it the
Ferroalloy Manufacturers
285
$77
“Magic City” label and
Iron and Steel Foundries
5,460
$640
spawned the cities of
Bessemer and Fairfield. Cast
Total
10,505
$2,107
iron production flourished as
well, with the raw materials in Source: Dun & Bradstreet.
the area good for certain types
ease of transportation of scrap metal rather
of pipe—American Cast Iron Pipe Company
than on availability of basic raw materials.
(ACIPCO) was founded in Birmingham in 1905. Still, the earliest mini-mills were located in
Ultimately, however, the phosphorus content
the Birmingham area. Birmingham Steel was
of the iron supply limited the area’s ability to
incorporated by AEA Investors in 1983 and
produce high-quality steel products, although
began operation with the acquisition of
it was ideal for foundry pig iron, to the extent
Birmingham Bolt Company’s rebar and
that in 1940 Birmingham provided 40 percent
merchant product mini-mills. Nucor bought
of the U.S. supply. Early iron and steel
its Birmingham operations after bankruptcy
production also spread northeast to Gadsden,
in 2002; Nucor-Birmingham has capacity for
where Gulf States Steel began integrated steel
600,000 tons of carbon steel reinforcing bars
mill operations around 1904.
used in the construction industry annually.
Steel Mill Developments. The integrated
steel mill founded in 1886 by the Tennessee
Coal, Iron, and Railroad Company was acquired
by Pittsburgh-based U.S. Steel in 1909 and
continues operation today as U.S. SteelFairfield Works. It is the state’s largest iron
and steel mill with about 2,200 workers and a
capacity of 2.4 million tons of raw steel and
640,000 tons of seamless tubular products
annually. Gulf States Steel in Gadsden declared
bankruptcy and closed in August 2000, idling
about 1,700 employees. Despite local
attempts to restore some operations,
purchasers of the site dismantled the mill and
shipped the equipment to a buyer in China.
With the growing use of EAF technology to
produce steel in a mini-mill environment,
location of a plant became more dependent on
Also in 1983 CMC Steel Alabama became the
second steel mini-mill for the Commercial
Metals Group, producing structural steel
materials in Birmingham; the plant’s workforce
in 2006 numbered about 400.
Tuscaloosa Steel was created in 1984 as a joint
venture of Tippins, O’Neal Steel, ACIPCO, and
British Steel. British Steel (now Corus) became
the sole owner in 1991. Initially the plant
used imported steel slabs, but the addition
of an electric arc furnace in 1996 expanded
capabilities and boosted capacity to 0.8 million
tons annually. Corus Tuscaloosa was
purchased by Nucor Steel in July 2004 and
employed 345 in 2006. Trico Steel, a joint
venture of LTV, Corus, and Sumitomo Metals
Industries, constructed a $465 million plant in
Decatur that became operational in 1997, with
United States Iron and Steel Industry Statistics
(Million metric tons of metal)
Pig iron production
Steel production
Steel mill product shipments
Imports of steel mill products
Exports of steel mill products
Apparent steel consumption**
Producer price index for steel
mill products (1982=100)
Total employment
Iron and steel mills
Iron and steel foundries
Net import reliance***
2000
2001
2002
2003
2004
2005
2006*
% Change
2000-06
47.9
102.0
99.0
34.4
5.9
120
42.1
90.1
89.7
27.3
5.6
107
40.2
91.6
90.7
29.6
5.4
107
40.6
93.7
96.1
21.0
2.5
107
42.3
99.7
101.0
32.5
7.2
117
37.2
94.9
95.2
29.1
8.5
109
39.3
96.4
102.0
46.6
9.8
130
-18.0%
-5.5%
3.0%
35.5%
66.1%
8.3%
108.4
101.3
104.8
109.5
147.2
161.3
180.5
66.5%
151,000
125,000
18%
141,000
117,000
16%
124,000
116,000
15%
127,000
116,000
10%
123,000
116,000
14%
122,000
115,000
15%
122,000
115,000
21%
-19.2%
-8.0%
16.7%
* estimated.
** apparent steel consumption = steel mill product shipments + imports - exports - semifinished imports +/- stock changes.
*** as a percentage of apparent consumption.
Source: U.S. Geological Survey.
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Alabama Business
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300 employees and capacity of about 1.9
million tons of finished sheet steel per year.
However, Trico filed for bankruptcy four years
later and in 2002 Charlotte-based Nucor
purchased the assets for over $116 million.
Now Nucor Steel-Decatur LLC, the mill was
upgraded and employs more than 600. The
plant was named Alabama’s large Manufacturer
of the Year in 2007. Nucor also purchased the
adjacent former Worthington Industries cold
rolling mill in 2004. IPSCO’s $425 million
Mobile Steelworks mini-mill began production
in April 2001, making discrete plate and hot
rolled coil for machinery, rail car, ship, bridge,
and other industrial products; capacity is 1.25
million tons per year. IPSCO was recently
acquired by a Canadian subsidiary of Swedish
company SSAB.
Foundry Developments. Birmingham’s iron
and steel production continues to have a
strong foundry emphasis. American Cast Iron
Pipe maintains the headquarters it set up in
Birmingham in 1905 and employs about 2,400
at its steel pipe and ductile iron pipe
operations there. The 2,100 acre site with
almost 60 acres of plant is the world’s largest
iron pipe casting plant. U.S. Pipe’s Bessemer
operation, founded as the Howard-Harrison
Iron Company in 1889, is one of the original
plants acquired by the company incorporated
in 1899 as the United States Cast Iron Pipe
and Foundry Company. U.S. Pipe was acquired
by Jim Walter Corporation in 1969. The
Bessemer plant employed over 300 in 2006.
Another 200 employees work at the company’s
Anniston plant. Jim Walter was renamed
Walter Industries in 1988; a subsidiary, Mueller
Water Products, operates a plant employing
around 600 in Albertville manufacturing fire
hydrants. Birmingham’s Sloss Industries, with
its roots dating from 1882, also falls under the
Walter umbrella and produced 400,000 tons of
furnace and foundry coke in 2006.
The Birmingham-based McWane Corporation
was incorporated as McWane Cast Iron Pipe in
1921 by former
American Cast Iron
Pipe Company
president, J. R.
McWane. The
company’s cast
iron pipe
operations in
Birmingham
employed about
300 in 2006.
M and H Valve
Company, with
cast iron valve
operations in
Anniston since
1925, was acquired
by McWane in the
1980s and employed almost 440 in 2006. Also headquartered in Birmingham, Citation began
operation in 1974 with the purchase of Jones
Foundry Company in Bessemer. Through
acquisition, Citation also has metal components foundries in Brewton, Marion, and
Columbiana and employs more than 1,200
at its Alabama foundry operations.
Looking to the Future. Although Alabama is
not among the largest iron and steel producing
states, the industry is a significant part of the
state’s economy. In 2006 Alabama’s iron and
steel industry had sales totaling more than
$2.1 billion from approximately 47 iron and
steel mill operations, four ferroalloy manufacturers, and around 37 foundries. About 18
plants in the state that purchase iron and steel
to manufacture pipes and tubes, rolled steel
shapes, and steel wire provide a market for
some of the iron and steel. Largest among
these companies are Hanna Steel, Southland
Tube, and Tubular Products. Alabama’s
industrial consumer base for steel products has
grown markedly over the last decade with the
state’s burgeoning auto industry and a strong
commercial construction sector. The National
Alabama Corporation railcar manufacturing
plant to be built in the Florence-Muscle Shoals
area will also be a heavy consumer of steel.
The state’s solid base in the industry has
helped attract new iron and steel producing
companies and expansions of existing firms.
Current development includes ongoing
construction of Nucor’s $167 million sheet
steel galvanizing facility in Decatur. With
capacity for about 500,000 tons annually, the
plant will employ about 100 at completion in
mid-2008 and utilize another 100 contract
workers. In May 2007 U.S. Pipe announced
that it will invest $45 million in a new, stateof-the art ductile iron pipe plant adjacent to its
existing facility in Bessemer. The operation
could be online early in 2009 with close to 100
jobs; it is the first new ductile iron pipe plant
built in the United States in over 55 years.
Alabama’s steel pipe production capacity will
expand with construction of a Berg Spiral Pipe
Corporation plant in Mobile. A venture of
Panama City-based Berg Steel Pipe, the $75
million facility will employ more than 100
making spiral pipe used by the oil and gas
industry. The state’s growing steel industry is
bringing a related business to Millport in Lamar
County—Steel Dust Recycling expects to
recycle 110,000 tons per year of steel mill
dust. The plant should be operational in the
second quarter of 2008 and employ 40.
Alabama’s iron and steel industry will see
significant expansion with the state’s most
recent economic development recruitment
success—the massive $3.7 billion plant to be
built by German steelmaker ThyssenKrupp AG
in northern Mobile County. Slated for
completion in 2010 with employment of
2,700, the plant will manufacture and process
carbon and stainless steel for high-end
manufacturers, including the automotive,
construction, utility, appliance, and machinery
manufacturing industries. Steel slabs will be
imported for further processing from a
ThyssenKrupp plant under construction in
Brazil. The Alabama plant is expected to have
a capacity of 4.1 million tons of carbon steel
products annually. Location of the plant in the
United States gives a boost to the country’s
steel industry outlook—until recently industry
analysts had thought a project of this
magnitude unlikely for the foreseeable future.
Carolyn Trent
[email protected]
(Visit cber.cba.ua.edu for an accompanying summary
of the U.S. and global iron and steel industries.)
World Production of Iron
and Steel 2006
(Million metric tons of metal, estimated)
Pig
Iron
Raw
Steel
United States
Brazil
China
France
Germany
Italy
Japan
Republic of Korea
Russia
Ukraine
United Kingdom
Other countries
39
35
380
14
29
12
83
28
52
32
10
144
96
32
420
20
45
29
114
48
70
40
14
272
World Total
858
1,200
Source: U.S. Geological Survey, Mineral
Commodity Summaries.
Alabama Business
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