China Steel Industry

By: EconomyWatch   Date: 30 June 2010

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China Steel Industry is the largest steel producing nation in the whole world. The amount of production is always on an upward slope with every passing year. In the year 2003, the total produced steel output was around two hundred and twenty million tonnes which increased to around two hundred and seventy three tonnes during the fiscal 2004. This increasing trend was maintained during the fiscal year 2005 and the total amount of steel production was hovering around three hundred and fifty million tonnes. A high degree of correlation can be seen between the rate of growth of the Chinese economy and that of the demand for steel in China. Both are growing more or less at a rate around ten percent. The percentage share of steel consumption of China in the whole world is approximately thirty one percent.The main reason for the astronomical growth of China Steel Industry is the constant support and assistance from the Chinese government. The China Steel Industry is basically a fragmented and scattered one even after some of M&A and consolidation has taken place in the Chinese steel market.

Some of the important facts and figures concerning China Steel Industry are :-

  • The tremendous growth of the steel industry in China has been possible due to constant back up from Chinese government through huge amount of subsidies.
  • The total amount of consumption of the Chinese market is the largest in the whole world, but the market research by various agencies and organizations say that the optimum level of steel consumption has not reached yet.
  • Though the domestic supply of steel exceeds that of the domestic demand of China, still it has to import steel from foreign countries. The only reason behind this is that the total amount of quality steel produced is relatively low compared to the total produced steel.
  • The steel industry saw a phase of recession from the mid 1970s till the late 1980s. The situation changed from the year 1989 and the main reason for this is the contribution made by China. From the year 1989 till date, the high growth rate in this steel sector was possible due to China Steel Industry which accounted for almost fifty six percent of the total rate of growth.

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