Steel imports played a crucial role in the recovery of the Port of New Orleans after Hurricane Katrina, increased nearly 60% in the first nine months of 2006, compared to the same period in 2005.
Imported steel comprises about 45% of the Port of New Orleans’ annual general cargo and yearly revenue stream. However, import restrictions on this valuable cargo nearly crippled the Port of New Orleans and many other ports throughout the nation in 2002 and 2003.
‘We must ensure we do not restrict free trade and the flow of steel in the future,’ said Gary LaGrange, President and CEO of the Port, during a joint press conference today with the American Institute for International Steel. ‘Our economy continues to grow and we must remain vigilant against import restrictions in the future.’
During the first nine months of 2006, the Port handled more than 3.44 million tons of imported iron and steel products. Those figures are up more than 1.27 million tons compared to the same period in 2005. And Port and industry officials expect another bustling year for imported steel in 2007, as US demand remains high and inventory adjustments continue throughout the first quarter.
AIIS President David Phelps visited New Orleans this week to tout a recently released economic impact study the Institute conducted measuring the effects of the Section 201 Steel Import Restrictions, implemented on March 5, 2002, and eventually repealed in December of 2003.
The Martin Associates study found 9.3 million tons of steel nationally was lost from the marine transportation system during the 22-month restriction period, or a negative 4.629 million tons per year. Those negative figures equaled losses of $391.1 million in personal wages, $360.6 million in business revenue, $77.3 million in federal taxes, and $38.2 million in state and local taxes. The losses also meant fewer jobs, as the marine transportation system missed 21.8 million man-hours, or 10,461 full-time jobs over the duration.
The study examined individual ports and regions, as well. It found the restriction period affected 631 direct and indirect jobs throughout the Lower Mississippi River Region, resulting in a loss of $11.3 million in direct personal income, $43.1 million in business revenue, and $13.7 million in state and federal taxes.
At the Port of New Orleans, steel imports fell 46.5% in 2003, to a historic low of 1.93 million tons. However, after restrictions were lifted, imported steel jumped 109% in 2004 to 4.04 million tons.
‘We must remain vigilant concerning protectionism issues,’ LaGrange said. ‘Imported steel is the lifeblood of the Port of New Orleans and is a main ingredient to the health of the United State’s economy as a whole.’
Imported steel is vital cog for industry throughout Louisiana, as well. Steelscape, a subsidiary of Grupo IMSA, produces cold-rolled metallic-coated steel coils for construction markets at the Port of Shreveport-Bossier. In 2006, Steelscape was responsible for 10,000 tons of steel moving through the Port of New Orleans and barged upriver, while another 5,000 tons reached its north Louisiana destination by rail from New Orleans.
Those figures are expected to climb rapidly, as Steelscape enters new phases of development. For instance, the company expects to demand between 100,000 and 150,000 tons of steel in 2007, eventually reaching an annual need for up to 500,000 tons annually.
‘That is big business not only for the Port of Shreveport-Bossier, but for the Port of New Orleans and the State of Louisiana,’ said Eric England, executive director of the Port of Shreveport-Bossier. ‘As demand for steel continues to grow, we must work with domestic and foreign producers alike to ensure economic success.’
Globally, the International Iron and Steel Institute predicts steel demand will increase about 2.6% in 2007, a figure labeled ‘generally satisfactory growth,’ by Institute officials.