From competitiveness to competition - The threat of minimills to large national steel companies

Minimill steel companies - relatively small, efficient producers that use electric furnaces to melt scrap or directly reduced iron ore - have steadily increased their share of US steel production from about 5% in 1970 to more than 35% today, forcing the closure of numerous integrated facilities over this period. Although these minimills received a stimulus from weak scrap prices in the 1980s, their continued success is attributable to lower labour and capital construction costs and steady improvements in electric furnace and rolling technology. Minimills have not yet spread widely to OECD countries outside North America, but they are likely to emerge in these countries unless governments attempt to block them in order to protect their declining large, integrated steel companies. Copyright (C) 1996 Elsevier Science Ltd.