Steel cities - supply chains, security, and synergies
“That a life lasts longer than the actual body through which it moves.”
Raymond Williams, Border Country
To reach the ‘pen’ in Welsh is to reach the end, or the summit if you’re being positive. To reach Penn, in the 17th and 18th century, was a create a Welsh community in the New World.
The villages and valleys of Wales and Pennsylvania were forged in coal, chapel, and steel. Old world certainties that built and sustained communities. The only certainty now is uncertainty. And we are reaching more than one ‘pen’ or end of a chapter.
Just as the last blast furnace at Port Talbot’s steelworks closed last week, US Steel is threatening to close three Pittsburgh plants if the US Government continues to oppose Nippon Steel’s ($14bn) purchase of US Steel.
President Biden, Vice President Harris, and ex-President Trump all oppose the Japanese acquisition of US Steel. The deal continues to be subject to a US Department of Treasury review. Although there is union scepticism about the sale to Nippon, there is also concern about the future of jobs if the deal fails to be completed, and both US Steel and Nippon are making this point to policymakers.
This may sound familiar to Welsh ears. Tata Steel, the Indian owners of the Port Talbot steelworks, have long made claims and counter claims to secure political support and investment.
When blast furnace number four was switched on just a decade ago, Tata claimed that it would secure steelmaking in the town for a century. It was this furnace that was turned off in September.
In Pennsylvania we see unanimity across the parties and administrations (Josh Shapiro, the Democratic Governor of the state, also opposes the sale to Nippon). The future of Port Talbot, and the Welsh and UK steel industry, has been a sore point between parties and governments.
With Labour governments now in power at both Westminster and Cardiff Bay there are increasing calls for an industrial strategy that considers steel and infrastructure as national assets for security, public ownership, net zero and supply chains.
In both the United States and the UK, we’ve long debated China’s influence on vital infrastructure. Our geo-political relationships with India and Japan are, of course, of a different order. But with Nippon’s role in building China’s steel industry and the increasingly competitive relationship between India and China, we can anticipate complications in trade, steel production and cost, and the control of supply chains.
Which brings us to the future of Port Talbot. Whilst traditional steelmaking has now finished, the intention is that it will be replaced with electric furnaces. The UK will soon rely on steel imports rather than primary steelmaking.
Over in Pittsburgh, US Steel says that without the sale to Nippon there are “serious questions" about the future of steelmaking in Pennsylvania. The corporation was founded in 1901, in Pittsburgh, by JP Morgan.
The Morgan family, titans of American industry and finance, first emigrated to America in the 17th century from… Wales. But we must now look much further east in considering the future of both Pittsburgh and Port Talbot.
Dewi Knight
Image: Aberafan beach (Port Talbot), a view from in front of the steelworks looking towards Gower.