Steelmaking and Steel Fabricating Potentials in Georgia and the Southeast by Tze I. Chiang William C. Eisenhauer ,, d, ( , .' • ± „ . c „ Martha A. Deadmore INDUSTRIAL DEVELOPMENT DIVISION tataztl ,.'1, ‘ \\,, e,90 P y Project E-400-220 1969 Engineering Experiment Station GEORGIA INSTITUTE OF TECHNOLOGY Atlanta, Georgia Project E-400-220 STEELMAKING AND STEEL FABRICATING POTENTIALS IN GEORGIA AND THE SOUTHEAST by Tze I. Chiang William C. Eisenhauer Martha A. Deadmore Industrial Development Division Engineering Experiment Station GEORGIA INSTITUTE OF TECHNOLOGY May 1969 Table of Contents Page Foreword Acknowledgments iii Summary v INTRODUCTION 1 Background 1 Objectives 1 Scope 2 General Approach 3 AN ECONOMIC REVIEW OF THE U. S. STEEL INDUSTRY 4 Steel and the American Economy 4 Shipments, Exports, Imports, and Consumption 8 Steel Forecast to 1980 14 Major Market Outlets 15 Technology and Investments 18 Pricing Structure and Regional Development 20 Regional Trends in Steel Production 24 THE DEMAND FOR AND SUPPLY OF STEEL MILL PRODUCTS IN THE SOUTHEAST 28 Demand for Domestic Steel 28 Imports 36 The Basis for Market Growth -- Steel Fabrication in the Six- State Area 39 Production Capacity 44 The Supply-Demand Deficit 49 GEORGIA'S POSITION FOR SERVING THE SOUTHEASTERN MARKET 53 Freight Costs and Delivery Time 53 Labor Costs and Availability 62 Sources of Raw Materials 64 The Growing Economic Base of Georgia and Bordering States 67 STEEL FABRICATING OPPORTUNITIES FOR GEORGIA 72 Commercial Forgings 72 Ball and Roller Bearings 73 Page Household Appliances 76 Metal Office Furniture 81 Selected Fabricated Metal Products 89 Selected Nonelectrical Machinery 93 Selected Transportation Equipment 96 Selected Instruments and Photographic Equipment 101 Metal Toys and Games 103 Structural Steel Fabrication 103 SELECTED REFERENCES 107 APPENDICES 113 1. Steel Ingot Production vs. Population in the United States, 1960-1967 115 2. Net Shipments of Steel Products in the United States, 1958- 1967 116 3. U. S. Raw Steel Forecasts 117 4. Number of Plants and Employees of Metalworking Industries in the United States and in the Six Southeastern States, 1967 119 5. Steel Mill Facilities in the Six Southeastern States, 1967 128 6. Inbound and Outbound Rail Shipments of Steel Mill Products in the Six Southeastern States, 1964 129 7. Railroad Rates 130 8. Ferrous Scrap Prices in Major U. S. Cities 134 9. Steel Scrap Supply and Consumption by Regions in the United States and in the Six Southeastern States, 1967 135 10. Representative Iron Ore Prices, 1969 136 11. Economic Growth Indicators in Georgia and Bordering States 139 * Tables 1. Indexes of Steel Ingot Production, Industrial Production, and Gross National Product in the United States, 1947-1968 7 2. Production, Shipments, Imports, Exports, and Consumption of Steel Mill Products in the United States, 1954-1968 9 3. Shipments, Exports, and Imports as a Percentage of Consump- tion of Steel Mill Products in the United States, 1954-1968 12 4. Forecast One: Projected Steel Ingot Production and Shipments, Exports, Imports, and Consumption of Steel Products in the United States, 1975 and 1980 14 Page Tables (continued) 5. Forecast Two: Projected Steel Ingot Production and Shipments, Exports, Imports, and Consumption of Steel Products in the United States, 1975 and 1980 15 6. Domestic Steel Distribution by Market Classifications, 1950- 1968 16 7. Steel Ingot Production, 1947-1965, U. S. and Major Steel Producing Centers 25 8. Shares of Total Steel Ingot Output Produced by Major Steel Centers, 1947-1965 25 9. Partial Demand for Domestic Steel Mill Products in the Six Southeastern States, 1960-1967 29 10. Share of Steel Shipments to the Six-State Area in 1967 and Percentage Increase for Carbon, Alloy, and Stainless Steels, 1960-1967, for Each State 31 11. Estimated Distribution by Market Outlets of Domestic Steel Mill Products in the Six Southeastern States, 1967 32 12. Partial Demand for Domestic Steel Mill Products by Kinds in the Six Southeastern States, 1967 34 13. Projected Demand for Domestic Steel Mill Products in the Six States, 1975 and 1980 Compared with 1967 35 14. Imports of Steel Mill Products by Customs Districts in the Six-State Area, 1960-1967 37 15. Imports of Steel Mill Products, Six-State Area and U. S., 1960-1967 38 16. Steel Mill Products Imported through Customs Districts in the Six Southeastern States, 1967 39 17. Volume of Steel Mill Products Imported through Customs Districts in the Six Southeastern States by Country of Origin, 1967 40 18. Number of Plants and Employment of Steel Fabricating Indus- tries in the Six Southeastern States, 1957 and 1967 41 19. Metal-Using Industries in the Six-State Area with Over 1,000% Gains in Employment between 1957 and 1967 42 20. Percentage Increases in Employment of Steel Fabricating In- dustries in the United States and the Six Southeastern States between 1957 and 1967 43 21. Steel Furnace Facilities in the Six Southeastern States, 1967 44 22. Intermediate Steel Mill Facilities in the Six Southeastern States, 1967 45 23. Selected Steel Finishing Mill Facilities in the Six South- eastern States, 1967 47 Page, Tables (continued) 24. Other Steel Finishing Mill Facilities in the Six South- eastern States, 1967 48 25. Inbound Rail Shipments of Steel Mill Products to the Six Southeastern States, 1964 52 26. Average Rail Freight Rates for Steel Mill Products from Nine Steel Producing Centers to the Six-State Area, 1968 54 27. Rail Freight Costs for Shipping 400,000 Tons of Steel Mill Products from Nine Steel Producing Centers to the Six-State Area, 1968 56 28. Metal Service Centers in the Six-State Area, 1963 57 29. Economic Growth of Georgia and Bordering States, 1950-1966 69 30. Value of Shipments of Household Appliances in the United States, 1958-1967 80 31. Manufacturers' Shipments of Metal Office Furniture in the United States, 1966 81 32. Shipments of Metal Stamping Products in the United States, 1963 92 33. Value of Shipments, Number of Plants, and Employment of Selected Nonelectrical Machinery Product Groups in the United States, 1958, 1963, and 1967 95 Maps 1. Inbound and Outbound Shipments of Steel Mill Products in the Six Southeastern States, 1964 (Based on 1% sample of terminations) 50 2. Railroad Freight Service: Normal Transit Times on Carload Shipments from Atlanta, Georgia 58 3. Transit Times on Direct Truckload Shipments from Atlanta 59 4. Transit Times on Direct Less-than-Truckload Shipments from Atlanta 60 5. One-Day Truckload Service from Six Georgia Cities 61 6. Cities with Non-Stop and Single-Plane Service from Atlanta 63 7. Locations of Plants in the United States with Closed Die Forgings as Their Primary Product, 1966 74 8. Locations of Plants in the United States with Closed Die Forgings as a Secondary Product, 1966 75 9. Locations of Producers of Complete Ball Bearings in the United States, 1966 77 10. Locations of Producers of Complete Roller Bearings in the United States, 1966 78 Page Maps (continued) 11. Locations of Producers of Parts and Components for Ball and Roller Bearings in the United States, 1966 79 12. Locations of Producers of Electric Household Ranges and Ovens in the United States, 1966 82 13. Locations of Producers of Household Refrigerators in the United States, 1966 83 14. Locations of Producers of Home and Farm Freezers in the United States, 1966 84 15. Locations of Producers of Household Washing Machines, Dryers, and Washer-Dryer Combinations in the United States, 1966 85 16. Locations of Producers of Household Vacuum Cleaners in the United States, 1966 86 17. Locations of Producers of Sewing Machines and Parts in the United States, 1966 87 18. Locations of Producers of Household Appliances, Not Else- where Classified, in the United States, 1966 88 19. Locations of Metal Office Furniture Producers in the United States, 1967 90 20. Locations of Producers of Bolts, Nuts, Screws, Rivets, and Washers in the United States, 1967 91 21. Locations of Producers of Metal Stampings in the United States, 1967 94 22. Locations of Producers of Industrial Cranes, Hoists, and Monorails in the United States, 1967 97 23. Locations of Producers of Metal-Forming-Type Machine Tools in the United States, 1967 98 24. Locations of Producers of Printing Machinery and Equipment in the United States, 1967 99 25. Locations of Producers of Motor Vehicle Parts and Acces- sories in the United States, 1967 100 26. Locations of Producers of Locomotives and Parts in the United States, 1967 102 27. Locations of Producers of Photographic Equipment and Sup- plies in the United States, 1967 104 28. Locations of Producers of Toys and Games in the United States, 1967 105 Figures 1. Steel Ingot Production vs. Population in the United States, 1900-1967 5 Page Figures (continued) 2. Indexes of Steel Ingot Production, Industrial Production, and Gross National Product in the United States, 1947-1968 (1957-59 = 100) 6 3. Steel Ingot Production and Shipments and Consumption of Steel Mill Products in the United States, 1954-1968 10 4. Imports and Exports of Steel Mill Products in the United States, 1954-1968 11 i Foreword This latest report of a series which identifies manufacturing opportuni- ties in Georgia is highly significant. It analyzes the potentials of a relatively underdeveloped industry in the Southeast. The manifestation of this underdevelopment is the need to import more than one-half the steel used in the region each year. Twenty-nine different steel fabricating industries are identified as being manufacturing opportunities in Georgia by this study. This report, by identifying the southeastern market potential for steel and specific fabri- cated steel products, highlights the profit opportunities in the manufacturing field. The steel industry is of great importance to the future welfare of the Georgia economy, since it contains the promise, when fully developed, of mate- rially bettering the per capita income of the state.