Vertically integrated steelmaking, like that along Northwest Indiana's lakeshore, dominated the industry after Henry Bessemer invented an inexpensive way to produce steel in the mid-19th century.
But then in 1969, Nucor built a smaller mini-mill, in which recycled scrap metal is fed into an electric arc furnace, in South Carolina. Generally less costly to operate, every new steel mill in the United States built since then has been a mini-mill.
Historically, there has been a divide between integrated steel producers like LTV, Inland, Bethlehem Steel, U.S. Steel and most recently ArcelorMittal USA and mini-mill operators like Nucor and Fort Wayne-based Steel Dynamics. But the traditional wall has broken down as newer and more high-tech mini-mills have been built.
Mini-mills accounted for just 15% of all steel production in the United States in 1981, but now account for more than two-thirds of all the steel produced in America, according to the American Iron and Steel Institute.
The Region's big integrated steelmakers are now in the mini-mill business, but integrated steel production is still thought to have a significant role in the industry's future.
"You're seeing the convergence of integrated and EAF production," American Iron and Steel Institute President and CEO Kevin Dempsey said. "Both have value and both are key parts of the overall industry."
U.S. Steel recently announced it would spend $774 million to attain complete ownership of Big River Steel in Arkansas, the newest and most technologically advanced mini-mill. ArcelorMittal, which divested most of its U.S. operations to Cleveland-Cliffs, save for its research and development center in East Chicago, is teaming up with Nippon Steel to invest more than half a billion dollars in a new electric arc furnace in AM/NS Calvert in Alabama. And Cleveland-Cliffs operates both blast furnaces like those in Northwest Indiana and electric arc furnaces that turn scrap metal into new steel products after its acquisition of AK Steel in Ohio.
"Most of the major integrated steel companies used the traditional technology," Dempsey said. "The mini-mills start out small as new companies and were new entrants in the steel markets, with their own supply chains independent of the integrated producers. They were side-by-side in the market, but now we're seeing consolidation into major companies."
Integrated steel production will remain in demand, especially with automakers that depend upon the higher grades of steel made at the integrated mills that have long been the industrial backbone of the Calumet Region.
"There's still a very significant need for integrated steel," Dempsey said. "But a diversity of technology serves customers' needs, increases access and puts our industry in a stronger place."
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