Steel and Heavy Industry

Steel carries high fixed costs and sells an undifferentiated product, so mills run flat out and the price falls to the cash cost of the marginal producer; capacity ordered at the top of a cycle arrives years later and depresses prices for a decade. Two changes rewrote the industry: the minimill, which melts scrap in an electric arc furnace at a fraction of the capital cost per ton, and the consolidation Lakshmi Mittal ran across distressed state-owned mills into what became ArcelorMittal. Tariffs, freight and Chinese output now set the price in most markets. The literature covers Nucor and the move to minimills, the Carnegie era and the Homestead strike, Tata and POSCO as national champions built with state backing, and Caterpillar as a cyclical equipment maker on the same demand curve.