The celebration yesterday of Bethlehem Steel Corp.'s new $300 million cold mill at Sparrows Point was tempered a bit by the fact that imported steel is on the rise and driving down prices.
Bethlehem spent more than $600 million renovating the Baltimore County plant, the largest piece of which was the cold mill. Had the steelmaker's board of directors declined to invest in the new mill, company officials said, it would have been the beginning of the end for the 113-year-old Sparrows Point facility.
"Today, it was fun being chairman," Duane R. Dun- ham, chairman, president and chief executive of Bethlehem, said after the official ceremonies, which included speeches by Gov. Parris N. Glendening, Rep. Benjamin L. Cardin, Baltimore County Executive C. A. Dutch Ruppersberger and Tom Conway of the United Steelworkers of America.
What probably wasn't as much fun was going to Washington last week and telling lawmakers that the steel industry is facing a crisis. Dunham and other steel executives, as well as Sparrows Point union representatives, were in the capital to urge the International Trade Commission to maintain tariffs - which are up for review - on steel imports.
"With a strong economy, a highly competitive steel industry and strong steel demand, the past several years should have been the best of times for the revitalized American steel industry," Dunham told the Congressional Steel Caucus. "Instead, 1998 was a year of crisis. The adverse effects of the 1998 crisis were felt throughout 1999. And in 2000, imports are again approaching crisis levels."
The U.S. Commerce Department says steel imports jumped from about 25 million tons a year in 1995 to about 42 million tons in 1998 - the "crisis" year - and the amount projected for 2000 is slightly more than 40 million tons.
Prices for domestic cold-rolled steel - the type made at the new mill - have fallen about $50 since early spring to about $400 a ton. Domestic hot-rolled steel, which is also produced at Sparrows Point, fell about $100 a ton to about $260 a ton. The ITC is not expected to make a decision on the tariffs until mid-November at the earliest.
"It is ruining the price structure such that our companies are having a hell of a time making a profit making steel," said Tom Sneeringer of the American Iron and Steel Institute. "Most are not making a profit."
Bethlehem lost $183 million last year, and in the first two quarters of this year netted $13 million, not including $22 million in an unusual after-tax gain. Last month, it was forced to close indefinitely one of its plate mills in Indiana last month because of market weakness, high inventories and an onslaught of imports.
Dunham said yesterday that the year's third and fourth quarters will likely not be as strong as the first half of the year, although he declined to say whether he expects Bethlehem will report a profit for the year.
The cold mill, which began running in May and is expected to be fully implemented by the end of the year, is expected to help boost Bethlehem's fortunes. The company expects to cut its costs by about $130 million a year because of the new cold mill and the job reductions and other improvements throughout the plant that were made in conjunction with the new facility. Its improved technology also will open new markets to the plant.
The union agreed to 400 job cuts, mainly through attrition, in return for the mill, which requires half the 800 workers of the old mill.
"The mill's running great," said Phil Pack, a steel erector who has worked at Sparrows Point for 34 years. "The market's not good and prices are not good, but the mill's running great."