Daily RC Article 24

U.S. Steel Industry


Paragraph 1

Although the United States steel industry faces widely publicized economic problems that have eroded its steel production capacity, not all branches of the industry have been equally affected. The steel industry is not monolithic: it includes integrated producers, minimills, and specialty-steel mills. The integrated producers start with iron ore and coal and produce a wide assortment of shaped steels. The minimills reprocess scrap steel into a limited range of low-quality products, such as reinforcing rods for concrete. The specialty-steel mills are similar to minimills in that they tend to be smaller than the integrated producers and are based on scrap, but they manufacture much more expensive products than minimills do and commonly have an active in-house research-and-development effort.

Paragraph 2

Both minimills and specialty-steel mills have succeeded in avoiding the worst of the economic difficulties that are afflicting integrated steel producers, and some of the mills are quite profitable. Both take advantage of new technology for refining and casting steel, such as continuous casting, as soon as it becomes available. The minimills concentrate on producing a narrow range of products for sale in their immediate geographic area, whereas specialty-steel mills preserve flexibility in their operations in order to fulfill a customer’s particular specifications.

Paragraph 3

Among the factors that constrain the competitiveness of integrated producers are excessive labor, energy, and capital costs, as well as manufacturing inflexibility. Their equipment is old and less automated, and does not incorporate many of the latest refinements in steelmaking technology. (For example, only about half of the United States integrated producers have continuous casters, which combine pouring and rolling into one operation and thus save the cost of separate rolling equipment.) One might conclude that the older, labor-intensive machinery still operating in United States integrated plants is at fault for the poor performance of the United States industry, but this cannot explain why Japanese integrated producers, who produce a higher-quality product using less energy and labor, are also experiencing economic trouble. The fact is that the common technological denominator of integrated producers is an inherently inefficient process that is still rooted in the nineteenth century.

Paragraph 4

Integrated producers have been unable to compete successfully with minimills because the minimills, like specialty-steel mills, have dispensed almost entirely with the archaic energy- and capital-intensive front end of integrated steelmaking: the iron-smelting process, including the mining and preparation of the raw materials and the blast-furnace operation. In addition, minimills have found a profitable way to market steel products: as indicated above, they sell their finished products locally, thereby reducing transportation costs, and concentrate on a limited range of shapes and sizes within a narrow group of products that can be manufactured economically. For these reasons, minimills have been able to avoid the economic decline affecting integrated steel producers.

Topic and Scope:

The U.S. steel industry; specifically, the characteristics and relative condition of the three major types of steel producers.

Purpose and Main Idea:

The author’s purpose is clearly announced in sentence 1: to show that some branches of the steel industry are doing better than others in these troubled economic times. To achieve that purpose, he needs to describe those branches and then explain the success of some and the weakness of others. And that’s just what our author does, carefully crafting his explanation as to why the minimills and specialty-steel mills are doing O.K. while the integrated producers are hurting.

Paragraph Structure:

The first sentence of  paragraph 1, as we’ve just noted, announces the topic, scope, and purpose about as explicitly as any test-taker could wish. The rest of the  paragraph  names and describes the three branches of the industry. If you sensed that the branches’ differences would be crucial to the passage and hence to the questions, you may have taken a few seconds to make a quick list of what’s what, like so:

INTEGRATED: process iron ore & coal/wide range of steel/big MINI: reprocess scrap steel/low-quality/limited range/cheap stuff/small

SPECIALTY: small/use scrap steel/expensive products/own R&D dept  

Paragraph 2 begins by setting the mini and specialty mills apart from the larger integrated mills— they’ve avoided the economic problems of the latter and some are even “quite profitable.” The  paragraph  then focuses on the advantages of the two smaller branches, one of which they share—a use of new technology. Furthermore, each has its own separate advantage, we’re told: Minimills produce only a few products (we heard that in  paragraph 1) to be sold close to home, while specialty-steel mills are flexible to the customers’ needs. This information allows us to expand on the lists above in an effort to continue keeping track of the various characteristics of each type of mill.

Having heard about how well the two smaller branches are doing—and keeping the opening sentence in mind—we’re eager to hear about the woes of integrated producers, and that’s just what  paragraph 3 presents. Lines “Among the factors that constrain the Competitiveness…..” are a laundry list of woes, but it seems that the big problem, outlined in lines “Their equipment is old and less automated, and does….”, is an inefficiency inherent in the entire integrated production process, something that the U.S. companies share with other integrated producers around the world.

After  paragraph 3 has explored the weaknesses within integrated producers,  paragraph 4 goes on to explicitly compare them to their smaller and more profitable brethren, and the discussion is detailed but not out of control. Note, for instance, that  paragraph 4 begins by picking up on  paragraph 3’s technology theme, highlighting the minimills’ and specialty mills’ technological efficiency. Note, too, that lines “In addition, minimills have found a profitable way to market steel products” simply repeat what we’ve already heard about minimills, that they sell a narrow range of cheap products close to home. That’s nothing new. Now it’s merely put to the service of the first sentence of  paragraph 1, which is reinforced at the very end: The big guys are hurting; the little guys are doing relatively OK.

The Big Picture:

When you’ve determined the author’s purpose, be sure to keep it in mind throughout. Here, it’s very easy to get lost in the morass of detail about steel production unless you keep remembering the initial point from sentence 1: the author’s desire to show that some branches of the steel industry are doing better than others. Having that in mind every step of the way keeps you focused right through last line.

Many passages are based on some contrast or other. But some are so heavily based on contrast that your main job becomes getting the contrasts under control. Here, we have the basic differences among the three branches, as well as the more fundamental contrast between integrated producers (hurting) and the other two (doing well). Making lists of traits or terms associated with each mill type can help you manage the information much the way scratchwork helps in Logic Reasoning.


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