Japanese low-sulfur A36 steel market disruption

Aside in response to student question. Japanese mills built greenfield with low-sulfur processing baked in; sold garden-variety A36 cheaper than US "premium" steel.

Higher and lower — well, this was in the days before low-sulfur steel was common. Nowadays we make low-sulfur steel all the time. In the mid 70s, when we made steel, it was what we called regular sulfur steel, which is 0.025 sulfur. Nowadays you can get 0.005 sulfur, five times less, at no extra cost. If you wanted to pay a 10 percent premium for your steel in 1975, they could lower the sulfur, but the U.S. steel companies wanted that 10 percent premium because they had to do extra processing. It was sort of a shock when the Japanese started selling garden-variety A36 plate on the West Coast that was low sulfur for no increase in price, in the mid 70s. In the United States we were getting a 10 percent premium and telling you it was ultra-high-quality steel, and the Japanese were selling the garden-variety steel. They had built brand new steel mills then and just incorporated low-sulfur processing into the whole thing. They didn't make anything but low sulfur. Nowadays everybody makes low sulfur.

Tom's experience as Bethlehem Steel engineer. Japanese suppliers selling A360 I-beams with 0.005 sulfur as standard; Bethlehem trying to extract a $20/ton (8%) premium for low-sulfur and failing. Part of the broader U.S. Steel industry decline narrative.

When I was an engineer at Bethlehem Steel, the Japanese were selling A360 — just simple I-beams — with 0.005 sulfur. Bethlehem Steel was trying to get an extra twenty dollars a ton, trying to charge an extra eight percent to give you low sulfur. The Japanese, everything they made was low sulfur — they couldn't give you 0.025. So today we have in general 0.005 sulfur in our steel, but 30, 40 years ago we didn't in the United States. They did in Japan. If you went back 50 years ago, they didn't have it anywhere in general unless they went to very expensive processing.