Plant location and the advent of slab casting by US steel minimills: An observation-based analysis

The advent of slab casting for steel that is produced in electric furnaces resulted in a wave of new investments in the construction of steel minimills. From 1989 to 2001, 10 new plants were constructed in the United States on the basis of new technologies. Some were built in established steel industry agglomerations, while others were built in greenfield locations-regions that bad little or no prior steelmaking activity. This research brings new evidence to bear on location decisions concerning modern steelmaking. The findings are based on direct observation and visits to the plants of all the new mills that were created by these investments. While the analysis reinforces the importance of transfer costs in decision making, it also argues that critical locational elements cannot be fully understood unless analyses take account of the characteristics of specific products, plants, and firms.