Japanese steel industry dominance 1970s

The Japanese installed continuous casters and went from six hours a ton to one and a half hours a ton — the competitive threat that eventually forced US retrofits.

So what happened to the US steel industry? In 1968 when Armco Steel put in new casting facilities, and they could have put in a continuous caster, what did they put in? Ingot casting, because there was no risk. The Japanese were putting in continuous casters and they were beating your socks off with productivity. They went from six hours a ton to one and a half hours a ton because of the productivity increase of using continuous casting. When Bethlehem Steel built the world's last steel mill built by a company, in the 1960s — from '65 through '70, took them about five years to build it, probably about a five or six billion dollar investment, just about bankrupt the second largest steel company in the world, Bethlehem Steel — they put in ingot casters. Both these companies in the mid '70s took out their ingot casters and put in continuous casters at the cost of a few hundred million dollars, because all of a sudden they realized what they should have known ten years before — that continuous casting was the way to go.

"The Japanese were making it at 0.005%... they were beating our socks off in quality of steel." Used to contextualize the US-Japan steel-quality gap circa 1975.

An ASM spec originally written in the 1920s or 1930s will say the sulfur must be less than 0.05%. By the 1940s they were saying less than 0.04%. By 1975, when Tom Eagar was working for a steel company, the sulfur was typically less than 0.01%. And the Japanese were making it at 0.005%. They had modern equipment and they were beating our socks off in quality of steel. 0.005%, 50 parts per million, was about the best they could do in the 1920s with any regularity. They didn't know how to control it until John Chipman told them what types of slags to use. I can go to an ASM spec today and they'll still say the sulfur has to be less than 0.05%. Are you kidding me? No one makes 0.05 steel anymore. They haven't made it since before 1950. Sulfur does a lot of bad things for toughness in steel, but we've learned how to make it better and better. We can regularly get down to 0.002 or 0.001 sulfur today if we want, but we don't usually need to.

Post-WWII Japan built steel, then shipyards, then autos — the canonical industrialization sequence Koreans then copied with a 25-year lag. The Edgar Speer *Iron Age* denial line is the U.S. response.

Take the Koreans. In the 1990s, I was the POSCO Professor. POSCO was the Korean steel company. The president of Korea took one of his colonels and said, "Mr. Park, I want you to go and start a steel company." Park went and talked to U.S. Steel. U.S. Steel sold them the technology, and they built POSCO Steel in Korea, which by 1997 was the world's largest steel company. From the early 1970s, in twenty-five years they became the largest steel company in the world, until the Chinese passed them by a long shot. But that was at the backing of the government of Korea to build what was, at that time, probably a ten- or fifteen-billion-dollar plant. They built a couple of them in Korea — Korea doesn't need but a couple. Saudi Arabia's got lots of natural gas, so what do they do with their natural gas? They build a gas reduction facility. They don't use blast furnaces — they use all the natural gas that they can't get out of the country any other economical way, they import iron ore, and they make steel. Because steel is fundamental to a growing economy. That's what the Japanese did after World War Two — they built steel companies and then they built shipyards, they became the largest shipbuilder in the world. Other people have passed them by, but people are all using that model.

Historically, where the United States has spent its efforts: this is a very nonlinear time scale. The industrial revolution of the 1800s to 1950 is over. The red is the industrial sector, and right after World War Two we were in our heyday. We'd bombed out the rest of the world's industrial sectors and we really were the world's industrial powerhouse. There's that famous story of the American Secretary of State, and the Japanese ambassador says, "Mr. Secretary, Japan would like to export some products to the United States" — this is in the 1950s. And the US Secretary of State says, "Well, Japan doesn't make anything that we would want." In 1950 that might have been true, but the Japanese started learning to make steel and ships and automobiles.