This category covers establishments primarily engaged in drawing wire from purchased iron or steel rods, bars, or wire, as well as those which may be engaged in the further manufacture of products made from wire. Establishments primarily engaged in manufacturing steel nails and spikes from purchased materials are also included in this industry. Rolling mills engaged in the production of ferrous wire from wire rods or hot-rolled bars produced in the same establishment are classified under SIC 3312: Blast Furnaces and Steel Mills. Establishments primarily engaged in drawing nonferrous wire are classified in other industry categories.
331222 (Steel Wire Drawing)
332618 (Other Fabricated Wire Product Manufacturing)
Steel wiredrawing plants manufacture a wide variety of products including barbed and twisted wire, steel baskets, brads, cable, chain link fencing, fence gates, posts and fittings, form ties, horseshoe nails, steel nails, paper clips, spikes, staples, wire cages, tacks, tie wires, wire fabric, wire carts, wire cloth, and wire garment hangers.
The steadily growing U.S. economy helped steel wiredrawing manufacturers continue the industry's expansion through 1998. Demand for steel wire was fueled by a significant increase in highway construction, residential housing construction, and the continued strength of the automotive industry. In spite of these positive factors, U.S. steel wire drawing industries faced growing competition from imports in the late 1990s. As a result, the value of industry shipments declined from $5.01 billion in 1998 to $4.76 billion in 1999 and to $4.58 billion in 2000.
In 1997, 273 companies produced steel wire and related products, down from 350 in 1995. The vast majority of establishments in this industry were larger companies employing 20 or more employees. Of all steel wire manufacturers, only 76 employed 20 or less in 1997. The largest concentration of firms by shipment value were in the Great Lakes region of the United States, with the southeast and New England regions ranking second and third, respectively. The largest producing states in descending order of shipments were Pennsylvania, Missouri, Illinois, Ohio, Tennessee, Texas, and Oklahoma.
Six major classes of steel wire and related products comprised the steel wire industry. Noninsulated ferrous wire rope, cable, and strand manufactured in wiredrawing plants represented approximately 19 percent of the dollar value of the steel wire and related products industry shipments in 1997, down from 22.1 in 1995. Steel nails, staples, tacks, spikes, and brads made up 9.2 percent of this industry's total product shipments, a 37 percent decrease from 14.6 percent in 1995. Steel wire produced in mills not producing steel rods or hot-rolled bars accounted for 44.4 percent of total product shipments, up from 37.2 percent in 1995, while other fabricated ferrous wire products, except springs, represented 18.1 percent of steel wire product shipments, up from 13.3 percent in 1995. Shipments for the other two industry categories (steel fencing and fence gates made in plants that draw wire, and ferrous wire cloth and other ferrous woven wire products made in plants that draw wire), together accounted for the remaining 28.3 percent of the industry's shipments.
The demand for steel wire evolved from the housing, construction, and automotive industries. To service these markets, steel wire makers bought steel rod from both domestic and foreign mills and drew it into wire and other related products. While steel wiredrawing companies shopped globally for the least expensive sources of steel bar, their ability to buy from foreign sources depended on the trade climate between the United States and its competitors. The rapid expansion of the Chinese, Russian, and South African steel industries saw steel supplies increase substantially in the 1990s. Steel consumption increased at the same time as the demand for wiredrawing products, particularly in housing and highway construction, aided growth.
During the 1980s, increases in imports of finished products during the recession coupled with high dollar valuations led many domestic steel wire producers to call for extended voluntary restraint arrangements and duties on imported steel wire and products. The high inflation rates, interest rates, and high value of the dollar made offshore sources of steel wire attractive and affordable for domestic users. Industry shipments dropped 21.4 percent between 1981 to 1982.
From the mid-1980s to the early 1990s, American steel wire producers charged many countries with unfair trading practices, most notably with dumping product at prices less than the cost of production. In February 1989, 30 Japanese producers were subject to duties as high as 29.8 percent. The Specialty Steel Industry of the United States, which represented virtually all U.S. producers of stainless and alloy tool steels and other high technology metals, found that import penetration grew to 20.2 percent of the U.S. market, up from 18.6 percent in 1990.
Imports remain a problem for the industry. In the mid-1990s, the Specialty Steel Industry asked the Clinton administration to work quickly in establishing a Mutual Specialty Steel Agreement with the European Union and the rest of the world on stainless steel imports. Stainless steel buyers purchased 24 percent of their product from foreign mills, depressing domestic prices. More than 500,000 tons of stainless steel were imported in 1996, spurred by a 5 percent increase in consumption.
Demand for steel wire in the late 1990s remained high, as a booming American economy drove the automotive and construction industries—the primary consumers of wire. Especially promising for wire mills was the continued rise in housing construction, fueled by low and moderate interest rates. Steel-framed housing construction became more prevalent, further increasing demand for wiredrawing products. Nevertheless, a U.S. International Trade Commission Report filed in September of 1999 revealed that domestic producers struggled to remain profitable in the first half of 1999. American firms were forced by a flood of cheaper imports to slash prices. Because of the 1997 Asian economic crisis and the currency devaluations that followed, wire mills based in Asia found it more profitable to sell their goods in the United States, especially as the construction industry stalled in Asia as a result of the economic downturn. Those countries cited for "dumping" inexpensive wire in the United States included India, Japan, South Korea, Spain, Canada, and Taiwan. Moreover, while these imports drove down U.S. steel wire prices, U.S. producers lost markets abroad, as Asian economies remained sluggish. To further compound the problem, the Russian economy collapsed in the late 1990s, eliminating another potential market for U.S. steel wire drawing products.
In December of 1999, workers from various steel wire sectors rallied at the White House to convince President Clinton to take action on the matter. "Our losses are mounting, and imports are surging into the United States at record levels," an industry spokesperson proclaimed in a press release. These feared proved founded as industry shipments continued to decline, falling to $4.58 billion in 2000, compared to $5.01 billion in 1998.
While the majority of steel wire producers were privately held firms, a relatively sizeable number were subsidiaries or divisions of larger companies. Some of the largest producers by sales and number of employees in 1998 included BICC Cables Corp., a division of BICC General ($3 billion in sales and 13,000 employees); Ohio-based Bekaert Corp. ($500 million in sales and 1,400 employees); Northwestern Steel and Wire Co. Of Sterling, Illinois ($596.4 million in sales and 2,000 employees) Keystone Steel and Wire Co. of Peoria, Illinois ($300 million in sales and 500 employees); and Mount Airy, North Carolina-based Insteel Wire Products ($266 million in sales and 1,056 employees).
Employment in the industry peaked in 1979 at 33,800 and then reached an industry low in 1985, with a work force of 20,900. While sharp increases in hiring led to employment figures of 27,100 in 1989, employment fell through 1992. In 2000, the industry employed 22,618. Of this total number of employees, 18,210 were production workers, most of whom were represented by the United Steel Workers of America. On average, these workers earned $14.56 per hour in 2000. The average work week was about 41 hours. In 1997, Pennsylvania was home to the greatest number of steel wiredrawing employees, with 2,353, followed by Illinois with 1,677 and Missouri with 1,557.
Steel wire makers faced several employment issues in the 1990s, including spiraling health care costs and the need for fully funded company pension plans. During this time, many smaller companies had health care costs that exceeded company earnings.
Competition from companies offering specialty metals and new processes posed a continual challenge to the industry, as their traditional markets, such as the automotive and construction industries, looked to use lighter, stronger, and cheaper materials. Seeking to expand its market as well as its sources for raw materials, the industry regarded recycling as a potentially important area.
Adams, Chris. "U.S. Producers Accuse Six Countries of Unfair Trade in Stainless-Steel Wire." Wall Street Journal, 30 March 1998.
Kelly, Nancy. "With All Chips on ITC Table, Producers Playing for US Market Pot." American Metal Market, 15 April 1999.
Marcus, Peter F. "Metal Tags Encounter Fork in the Road." Purchasing, 16 January 1997. Available from http://www.manufacturing.net/magazine/purchasing/archives/1997/pur0101.97/011mnnews.htm#ME .
"Steelworkers Rally at White House." PR NewsWire, 8 December 1999.
Stundza, Tom. "Supply Overwhelms a Weakening Market." Purchasing, 13 February 1997. Available from http://www.manufacturing.net/magazine/purchasing/archives/1997/pur0213.97/021bars.htm .
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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