Bessemer steel plants generated large volumes of scrap, but Bessemer furnaces generally could not or did not use scrap for a number of different reasons. In economic terms, this commodity had a value, but little utility; it lacked usefulness. [Andrew] Carnegie changed that.It helped to have the open-hearth furnace, which could remelt scrap at the same time that it converted molten iron to steel.
An acid open hearth required the use of very high-quality scrap, which made its operation expensive. When Carnegie developed the capability to produce basic steel in open-hearth furnaces, he was able to use lower-quality scraps that were contaminated with phosphorus, so it was cheaper to make.Impound entrepreneurial alertness in ceteris paribus, and some other location for primary steelmaking might yield a minimum of inbound transportation costs (which matters, because steelmaking is seriously weight-losing). With alertness to the reuse of scrap, the capacity emerges initially in Pittsburgh.
Carnegie could use this material in basic furnaces and convert it into steel—he was the first in the United States to do this. Carnegie owned two of the most productive Bessemer plants in the world, so in essence he could get the scrap for free. Not only that, he used it to make armor plate, boiler plate for locomotives and steel beams. He now had a plant, unique in the country, where he could take large volumes of low-utility scrap or even purchase it from others at low cost, and make high-value products that had high utility. That was one of Carnegie’s big breakthroughs, an important one that helped secure Pittsburgh’s place as the steel capital.