SIC 3441
FABRICATED STRUCTURAL METAL



This classification includes establishments primarily engaged in fabricating iron and steel or other metal for structural purposes, such as bridges, buildings, and sections for ships, boats, and barges. Establishments primarily engaged in manufacturing metal doors, sash, frames, molding, and trim are classified in SIC 3442: Metal Doors, Sash, Frames, Molding, and Trim; and establishments doing fabrication work at the site of construction are classified in the Construction industries.

NAICS Code(s)

332312 (Fabricated Structural Metal Manufacturing)

Industry Snapshot

The fabricated structural metal industry was strong in the late 1990s. In 2000, total fabricated structural metal shipments were valued at $18.8 billion. Since a primary market for fabricated structural metals was the building and construction industry, metal fabricators benefited from the American construction boom of the late 1990s. Nevertheless, competition from cheaper imported products was a concern for fabricated structural metal producers. Moreover, the economic collapse in Asia eroded export markets for U.S. fabricated structural metal manufacturers.

The industry's products were divided into five categories by the U.S. Census Bureau. The largest sector—fabricated structural metal bar joist and concrete reinforcing bars—accounted for over 65 percent industry shipments in the late 1990s. The second category—structural metal for bridges—represented 3.2 percent of total shipments, while fabricated structural iron for ships, boats, and barges (category three) made up 1.9 percent. Other fabricated structural metal products (category four) comprised 20.5 percent, and the final category—fabricated structural metal, not specified by kind—accounted for the remaining 9 percent.

Organization and Structure

A total of 3,040 establishments were involved in the production of fabricated structural metal in 1997. 1,176 of these facilities (about 40 percent) were larger companies with more than 20 employees. With 260 fabricated structural metal establishments, California led the nation in this regard. The state's 1997 shipments were valued at $1.1 billion, or approximately 6.6 percent, of total shipments. Although Texas had fewer establishments in this industry—with 237—its shipments were the highest in the country. In 1997, Texas' shipments of fabricated structural metal products were $1.6 billion, or about 9.6 percent of the total. Ohio was home to the third-highest number of companies in this industry in 1997. Its 177 establishments produced shipments worth over $762.0 million, or 4.7 percent of the total.

Background and Development

At first, metals were hammered into shape, then when it was found that fire could alter the structure of the ores, furnaces were built to cast metals into useful shapes. The use of ferrous metals, however, did not begin until 7000 years after copper and bronze were first smelted. Once technology advanced and iron smelting began, iron rapidly replaced copper for tools and weapons. By 100 B.C. the use of iron as a semi-structural material was recognized.

By the 1990s the kiln, hammer, and anvil had been replaced with blast furnaces and multi-ton presses. Structural shapes were continuously cast and forged, later to be cut to standard lengths. Although greater understanding of the metallurgical properties of metals occurred over the course of the industry's development, and manufacturing processes evolved, which served to lend uniformity and structural integrity to the final product, working conditions in the industry changed little. While steel and iron mills were much safer places to work in the early 1990s, thanks largely to the Occupational Safety and Health Act and the Environmental Protection Agency, hazards remained, making mill work a fairly dangerous occupation in comparison to other manufacturing jobs.

Industry shipment levels remained fairly constant between 1982 and 1994. In 1982 the value of shipments was $8.8 billion. By 1995 this value reached a high point of $10.8 billion. The lowest level during this period was in 1983 when the value of shipments was $8.0 billion.

Current Conditions

The fabricated structural metal industry was bolstered by the overall strong American economy. Most important to the industry was the construction boom of the late 1990s. As a result of increased demand from the construction sector, shipments of fabricated structural iron or steel products for commercial, residential, institutional, or public buildings generated shipments rose to more than $5.6 billion in the late 1990s, or about 34 percent of all fabricated structural metal product shipments. The market for fabricated structural metal for bridges was promising, as well. A report issued by the U.S. Department of Commerce revealed that over one third of American bridges were in need or replacement or repair.

Total industry shipments grew from $16.11 billion in 1997 to $18.85 billion in 2000. The cost of materials increased from $8.96 billion to $10.13 billion over the same time period, and employment in the industry grew from 92,471 workers to 98,960 workers.

Despite the strong domestic construction market, imports remained a threat. With the devaluation of Asian currencies in the wake of the financial crisis of the late 1990s, steel imports flooded into America. As a result of this oversupply, profits remained low. At the same time that import levels rose, U.S. saw key fabricated structural metal markets in Asia and Russia dwindle. The construction industry stalled in Asia, thereby reducing demand for the offerings of U.S. firms.

Industry Leaders

Valmont Industries Inc. was a leading company in this industry. The Valley, Nebraska-based firm's 1998 sales were $606.3 million, up from $522.0 million in 1995. The company, which employed 3,859 workers, derived about 49 percent of its 1998 sales from engineered metal structures, which it sold primarily to lighting, utility, and communications companies. Another key player in the industry was Acme Metals Incorporated. With over 2,000 employees and 1998 sales of $459.9 million, Acme's fabrication division—Acme Packaging—earned about half of the company's profits. Acme Packaging obtained the steel for its fabricating operations from Acme Steel.

Nucor Corporation of Charlotte, North Carolina, realized significant growth in the late 1990s because of the considerable capital investments it had made during the decade. Its Jewett, Texas, mill received a continuous caster, which went online in June 1994. The company's Hickman, Arkansas, hot-rolled sheet mill received a $35.0 million thin-slab caster. These investments toward expansion helped Nucor record a 59 percent rise in profits in 1993 and gave the company the second-highest operating profit, $432.3 million, in 1995.

In December 1996, Nucor Corporation announced plans to spend an additional $250.0 million for modernization and capital improvement projects. These expenditures included $80.0 million for increased capacity and functioning of the Norfolk, Nebraska, mill; a galvanizing line at Berkeley, South Carolina, capable of producing 10 million tons of steel a year at an estimated cost of $40.0 million; $30.0 million of improvements at the Crawfordsville, Indiana, facility; and a new steel-deck facility in Fort Payne, Alabama, at a cost of $10.0 million. These capital improvements reduced costs and increased Nucor's tonnage so that it could meet competition from other mini-mills such as Gallatin Steel Co., North Star BHP Steel Ltd., and Steel Dynamics Inc. The result of Nucor's efforts was 1998 sales of $4.2 billion. With 7,200 employees, the company was the fourth-largest steel maker in the United States.

Workforce

Employment levels steadily decreased in the 1980s, falling from 103,500 total employees in the industry in 1982 to 70,700 in 1993. With the economic expansion of the mid and late 1990s, however, more people found work in this industry. By 1995, total employment had risen to 73,700, and by 2000 the work force had grown to 98,960. Of this total number, 72,085 employees were production workers, who on average earned $14.78 per hour in 2000.

Research and Technology

Innovations in casting technology boosted the productivity of structural metal manufacturers. One manufacturer of casting equipment and systems, Rokop Corporation, was experiencing growth as a result of two companies' capital investments. Nucor Corporation requested another continuous caster, making it the fourth piece of such equipment installed in its facilities. The other company making a capital investment with Rokop was Tennessee Valley Steel Corporation. This project added a dual-stream ladle sequencing system, the fourth ladle system project for Rokop, two of which were sold to casters in China and Hungary. A fifth system of this sort was sold to Keystone Steel & Wire Company.

Rokop Corporation's projects were indicative of a trend in the structural metal industry to modernize facilities. Steel mills and iron casters have been around for centuries, while the principal technology has changed little. However, controlling processes to improve quality and reduce costs enabled great technological innovations. Bethlehem Steel participated in this strategy by investing $100 million in modernization of its new subsidiary, Bethlehem Structural Products, which was a leading supplier of structural steel and sheet-piling to the construction industry. The aim of this three-year project was to increase productivity, cut costs, and improve quality. However, in 1995, Bethlehem Structural Products Corp. underwent major overhauls that resulted in the discontinuation of its steel making operations.

Further Reading

Petry, Corinna. "Nucor's Cash Headed Into Modernization." American Metal Market , 30 December 1996.

Robertson, Scott. "Import Flood Sink Steel Profit." American Metal Market , 4 October 1999.

Teaff, Rick. "Steel Chiefs Dash for Cash." American Metal Market , 30 May 1996.

United States Census Bureau. "Printing Ink Manufacturing." Available from http://www.census.gov/prod/ec97/97m3314c.pdf October 1999

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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