Spatial Aspects of Capacity Change by U.S. Integrated Steel Producers

This paper examines changes in the location of ore-based steel-making capacity in the U.S. during the period 1974-1991 using data on each of the 45 ore-based mills that were in operation in 1974. We find that the geographic distributions of demand and of competition from minimills and imports were important in determining where capacity reductions occurred and which plants were closed. Technology in use at the plant also affected capacity adjustment. However, we find that regional variation in prices of raw materials were not important factors in determining where steel-making capacity was reduced.