World Steel Industry

World Steel Industry : Steel, the recycled material is one of the top products in the manufacturing sector of the world.

World Steel Industry : Steel, the recycled material is one of the top products in the manufacturing sector of the world.

The Asian countries have their respective dominance in the production of the steel all over the world. India being one among the fastest growing economies of the world has been considered as one of the potential global steel hub internationally. Over the years, particularly after the adoption of the liberalization policies all over the world, the World steel industry is growing very fast.

Steel Industry is a booming industry in the whole world. The increasing demand for it was mainly generated by the development projects that has been going on along the world, especially the infrastructural works and real estate projects that has been on the boom around the developing countries. Steel Industry was till recently dominated by the United Sates of America but this scenario is changing with a rapid pace with the Indian steel companies on an acquisition spree. In the last one year, the world has seen two big M&A deals to take place :-

• The Mittal Steel, listed in Holland, has acquired the world’s largest steel company called Arcelor Steel to become the world’s largest producer of Steel named Arcelor-Mittal.
• Tata Steel of India or TISCO (as listed in BSE) has acquired the world’s fifth largest steel company, Corus, with the highest ever stock price.

It has been observed that Steel Industry has grown tremendously in the last one and a half decade with a strong financial condition. The increasing needs of steel by the developing countries for its infrastructural projects has pushed the companies in this industry near their operative capacity.

The most significant growth that can be seen in the Steel Industry has been observed during the period 1960 to 1974 when the consumption of steel around the whole world doubled. Between these years, the rate at which the Steel Industry grew has been recorded to be 5.5 %. This roaring market saw a phase of deceleration from the year 1975 which continued till 1982. After this period, the continuous fall slowed down and again started its upward movement from the early 1990s.

Steel Industry is becoming more and more competitive with every passing day. During the period 1960s to late 1980s, the steel market used to be dominated by OECD (Organization for Economic Cooperation and Development) countries. But with the fast emergence of developing countries like China, India and South Korea in this sector has led to slipping market share of OECD countries. The balance of trade line is also tilting towards these countries.

The main demand creators for Steel Industry are Automobile industry, Construction Industry, Infrastructure Industry, Oil and Gas Industry, and Container Industry.

New innovations are also taking place in Steel Industry for cost minimization and at the same time production maximization. Some of the cutting edge technologies that are being implemented in this industry are thin-slab casting, making of steel through the use of electric furnace, vacuum degassing, etc.

The Steel Industry has enough potential to grow at a much accelerated pace in the coming future due to the continuity of the developmental projects around the world. This industry is at present working near its productive capacity which needs to be increased with increasing demand.

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World steel industry and Crude Steel Production

The following table gives a clear picture upon the major crude steel producers in the world as of the year 2004.

Country	Crude Steel Production (mtpa)
China	272.5
Japan	112.7
United State	98.9
Russia	65.6
South Korea	47.5
F.R.Germany	46.4
Ukraine	38.7
Brazil	32.9
India	32.6
Italy	28.4

In the year 2004, the global steel production has made a record level by crossing the 1000 million tones. Among the top producers in the steel production, China ranked 1 in the world.

Production of steel in the 25 European Union countries was at 16.3 mmt in January 2005. Production in Italy increased by 11.5 per cent in comparison to the same month in 2004. Italy produced 2.5 mmt of crude steel in January 2005. Austria produced 646,000 metric tones.

In Russia it increased by 4.0 per cent to reach at 5.5 mmt in January.

In case of the North America region particularly in it was 1.5 mmt of crude steel in January 2005, up by 8.0 per cent compared to the same month in 2004. Production in the United States was 8.3 mmt.

Brazil had produced 2.6 mmt of crude steel in January 2005. In South America region it was 3.7 mmt for January 2005.

According to rating made by the ” World Steel Dynamics”, Indian HR Products are categorized in the Tier II category quality of products. Both EU and Japan have ranked the top. USA and South Korea comes as like India.

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World Steel Industries

World Steel Industries are undergoing a booming phase with all sorts of Mergers and Acquisitions taking place all around the world. The key market players are now subjected to fierce competition from the new companies from developing economies. From the early 1990s, China and South Korea have emerged significantly in the World Steel Industries. In the very recent years India is also on a winning streak in terms of M&A. First of all, it was NRI Laxmi Mittal’s Mittal Steel (listed in Netherlands) to acquire Arcelor, many times greater than it. Then came the Indian big shot TATA Steel to acquire Corus, the fifth largest steel company in terms of production capacity. Thus, it is being observed that World Steel Industries is going at a very competitive pace and time where the OECD (Organization for Economic Cooperation and Development) countries don’t have their monopoly on the steel market.

The main demand for World Steel Industries comes from the construction industry. With the developmental works on a rise in both the developed and developing countries, the infrastructure industry along with real estate boom, the demand for steel is rising like anything. For example, more and more real estate companies are using steel frames for building houses. In USA, it had been observed in the early 1990s that the use of steel for house building has increased by nearly five times in just one year. The automobile industry is also coming up fast as a potential demander for World Steel Industries because from a research it has been found out that the use of steel in the vehicles would cause the weight of the same to lessen by almost twenty five percent.

The other industries who demand steel industries involve appliance industries, Oil and Gas industries and container industries.

On the technological front, the World Steel Industries are making rapid improvement with the implementation of cutting-edge technologies like steel making through the utilization of electric furnace, continuous annealing, casting of thin slabs, and vacuum degassing.