A strong food pack, including what some in the steel
industry believe is the largest tomato pack in U.S. history, is
whetting the appetites of the limited number of U.S.
manufacturers in the tin products market.
The same producers remain active in efforts to promote the
use of steel cans for packaging food products, having ceded the
beverage can market to aluminum years ago but determined to
hold onto or gain market share in the challenge from freezer
bags, pouches, cartons and other containers.
The size of the food pack, which is an annual measurement of
the amount of food packed in cans in the United States, is one
indicator of strength for the tin products market. Another is
the fact that in recessionary times, Americans generally dine
out lesstranslating into increased purchases of canned
tomato sauce, soups, fruits and vegetables.
ArcelorMittal USA, Chicago, and U.S. Steel Corp.,
Pittsburgh, are the dominant players in the U.S. tin products
market, accounting for most of the U.S. production. USS-Posco
Industries Inc., Pittsburg, Calif., a joint venture of U.S.
Steel and Posco Ltd., Seoul, South Korea, and Ohio Coatings
Co., Yorkville, Ohio, a subsidiary of Severstal North America
Inc., Dearborn, Mich., apply tin coating to substrate provided
by their parent companies.
The steel can market remains relatively stable, with tin
product shipments from U.S. mills hovering around the
3-million-ton-per-year mark, and tin products avoided the wild
price fluctuations other steel products faced throughout 2008
and in 2009.
"Usually when you get into economics like we are in now, you
see more people buying food in cans," said Mark Glyptis,
president of United Steelworkers union Local 2911, which
represents workers at ArcelorMittal Weirton in Weirton, W.Va.
"They eat out less. They stay home and buy more food cans. The
food pack was good in 2009. You can see that in our order book.
It's been strong. We've seen pretty strong demand all year for
food cans, coffee cans and aerosol cans."
U.S. Steel and ArcelorMittal both expected strength in tin
products to continue through the end of 2009 and believe
prospects are good for 2010 as well.
"We expect improvement in our overall fourth-quarter
results, mainly as a result of increased demand for flat-rolled
products in North America, driven primarily by automotive
markets and continued strength in tin mill markets," John P.
Surma, chairman and chief executive officer of U.S. Steel,
In 2009, producers were able to push through tinplate price
increases ranging from 15 to 35 percent compared with 2008 as
they rolled a competitive market price adjustment into base
pricing in an effort to bring contract pricing in line for most
customers. The plan succeeded, leading in part to predictions
that pricing for 2010 will be similar to 2009.
"The market (for tin mill products) has been pretty decent,"
Phil Withum, vice president of commercial at Ohio Coatings,
said. "The market is pretty stable as far as food cans and
aerosol cans are concerned. Naturally, we would like to do
more, but we can't really complain very much."
Rich Tavoletti, executive director of the Canned Food
Alliance, said that historical can shipment data shows food can
shipments have been relatively stable over the past five years,
varying between 29.6 billion and 30.5 billion cans per
Total U.S. tin mill product shipments stayed at around the
4-million-ton-per-year level in the late 1990s, according to
the American Iron and Steel Institute (AISI), Washington.
Industry consolidation brought about a reduction of some tin
mill capacity to the point that shipments now are between 2.8
million and 3 million tons per year.
The Canned Food Alliance, funded in part by the AISI, was
created by steel producers who wanted to combat declining
shipments. "What we are doing is a lot of consumer research to
promote the nutritional value of food in cans vs. its fresh and
frozen counterparts," Tavoletti said.
The Canned Food Alliance recently worked with the University
of California at Davis on a study of the nutritional value of
canned, fresh and frozen fruits and vegetables. Among the
study's findings were that the canning process locks in
nutrients at their peak of freshness, and due to the lack of
oxygen during the storage period the canned fruits and
vegetables remain relatively stable up until the time they are
consumed and have a longer shelf life.
These are the kinds of messages the Canned Food Alliance is
taking to consumers to try to help steelmakers hold onto market
share against inroads from freezer bags, aluminum, plastics,
cartons and other containers. Such efforts seem to be working,
Withum said, although he acknowledged that other materials have
made some inroads.
"It's hard to judge how much market share has changed in the
short term," he said. "These kinds of things happen gradually,
over a period of four or five years. I don't think we have seen
a particularly big move, though." Scott