Iowa Just Landed a Major Addition to the US Steel Industry
On Monday, President Trump announced that Minnesota-based Mesabi Metallics (Mesabi) will invest $15 billion to build a new steel mill in Lee County, Iowa. The new site would lie roughly 100 miles southwest of the Quad Cities. Mesabi is a mining and resource company owned by the Essar Group, a multi-billion dollar conglomerate in India.
Mesabi plans to begin operations at its Lee County steel mill in 2030. The plant would have an annual production capacity of up to 10 million metric tons of steel, making it the largest steel mill in the nation. The project is expected to create 6,000 construction jobs and 1,700 permanent jobs upon completion.
Last month, Mesabi also started operations at its new $3 billion iron ore mining and processing complex in Nashwauk, Minnesota. The Nashwauk project became the first iron ore mine to be built in the U.S. in 50 years. Combined, Mesabi’s Iowa and Minnesota facilities will allow it to vertically integrate its iron ore operations from mining to finished steel.
The zenith of America’s steel manufacturing was in the 1970s. In 1973, U.S. steel production peaked at 136.8 million metric tons, according to the World Steel Association. Over the decade, the U.S. produced, on average, about 120.2 million metric tons of steel each year.
But this golden age of U.S. steel production was not to last. Due to a potent mix of the 1981-82 recession, a rise in foreign competition, antiquated facilities and a structural shift towards aluminum and plastics, the U.S. steel industry quickly fell on hard times. By 1982, U.S. steel production had plummeted to just 67.7 million metric tons, a 44% decline from the annual average produced during the 1970s. The end result was the de-industrialization of America’s “rust belt” that spread across Illinois, Indiana, Michigan, Ohio and Pennsylvania.
Since 1990, U.S. steel production has generally fluctuated between 75-100 million metric tons per year. A respectable total, but still a far cry from the halcyon days of the ‘70s. Last year, the U.S. produced 81.9 million metric tons of steel, up 3.1% from 2024.
In 2025, the U.S. surpassed Japan to become the world’s third largest steel producer. Last year, America’s production of 81.9 million metric tons of steel accounted for 4.4% of global production. China remains the global behemoth in steel production. Last year, China produced a massive 960.8 million metric tons of steel, or 52% of the world’s total production. No. 2 India produced 164.9 million metric tons last year, or 9% of global production.
Despite its stature as the world’s third largest producer of steel, the U.S. still consumes more steel than it can domestically produce. Thus, in 2025, the U.S. imported a total of 25.2 million metric tons of steel. America’s Top 3 suppliers for that imported steel were Canada (17.9%), Brazil (16.3%) and Mexico (11.2%).
To help boost America’s steel industry, Trump has been quite aggressive in imposing tariffs on foreign steel. Tariffs are essentially a tax on specific foreign goods imported into the U.S. On June 3, 2025, Trump increased the existing tariff on imported steel from 25% to 50%. The exception was steel imported from the United Kingdom, which remained at 25%. By making foreign steel more expensive to buy, Trump’s goal was to make the U.S. less reliant on foreign suppliers and to incentivize the production of steel within the U.S.
Even with the increased production, the U.S. is still not self-reliant in producing the steel we need to fuel our growing economy. We must still import a sizeable amount of steel to meet that demand. The Lee County mill is a major step in that direction and will be a key addition to the U.S. steel industry.
Mark M. Grywacheski, Investment Advisor
Quad Cities Investment Group is a Registered Investment Adviser.
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