The Chinese Steel Market: Perspectives and Strategies

February(
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ASSIGNMENT:!INTERNATIONAL!MANAGEMENT!
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The(Chinese(steel(market:(perspectives(and(strategies(
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Subject!area!!!
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(Picture!:!http://www.chinadaily.com.cn)!
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Project!supervisor!!
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Chinese!steel!market!analysis!
Trends!in!the!Chinese!steel!industry!
Perspectives!&!strategies!for!China!
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Prof.!Dr.!Paul!Meyer!
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Submitted!by!!
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Alain!Mermoud!
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alain.mermoud@etu.hesge.ch!
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Date!!
15.02.10!
15#
The!Chinese!steel!market:!perspectives!and!strategies!
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2!
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Table(of(Contents(
Executive(summary ................................................................................................ 3!
Abbreviations......................................................................................................... 3!
1! Introduction ..................................................................................................... 4!
2! Parameters(&(framework(conditions ................................................................ 5!
2.1! History......................................................................................................................................................... 5!
2.2! Strategic!position!and!major!economic!sectors ........................................................................ 5!
2.3! Political!situation!and!legal!issues .................................................................................................. 6!
2.4! Cultural!aspect ......................................................................................................................................... 6!
2.5! Environment............................................................................................................................................. 7!
2.6! Production!process................................................................................................................................ 7!
2.7! Product!specificities .............................................................................................................................. 8!
3! Analysis ............................................................................................................ 8!
3.1! Economic!analysis .................................................................................................................................. 8!
3.2! Position!of!the!Chinese!steel!market!in!international!trade ................................................ 9!
3.3! Macroeconomic!parameters .............................................................................................................. 9!
3.4! Business!structures!usually!used ................................................................................................. 10!
3.5! Major!trading!partners!!overall!world!exports!&!imports .............................................. 10!
3.6! Market!facts!&!figures........................................................................................................................ 10!
3.7! Extent!of!international!integration .............................................................................................. 11!
4! Potential(outcomes......................................................................................... 11!
5! Personal(assessment....................................................................................... 12!
6! Prospects........................................................................................................ 13!
7! Conclusion ...................................................................................................... 13!
Bibliography ...................................................................................................................................................... 14!
Attachments....................................................................................................................................................... 15!
Statistics!&!tables ............................................................................................................................................ 16!
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Alain!Mermoud!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!MSc!BA!2010!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!15!February!2010!
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3!
Executive(summary(
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Steel!is!essential!for!economic!growth,!as!it!is!primarily!used!for!housing,!construction,!
infrastructure,! transport! and! energy! delivery.! Indeed,! this! metal! is! the! second! most!
important! commodity! (15%! of! worldwide! consumption)! after! oil.! During! the! last!
decade,!the!economic!boom!in!China!has!caused!a!massive!increase!in!the!demand!for!
steel.!Between!2000!and!2005,!world!steel!demand!increased!by!6%.!Since!2000,!several!
Chinese!steel!firms!have!risen!to!prominence,!including!Tata!Steel!(which!bought!Corus!
Group! in! 2007),! Baosteel! Group! Corporation! and! Shagang! Group.! The! main! producer!
countries! are! China,! Japan,! and! the! USA.! The! largest! companies! are! ArcelorMittal,!
Nippon! Steel! and! Baosteel! Group.! Almost! 40%! of! the! steel! production! is! exported!
internationally.!In!2008,!steel!started!to!be!traded!as!a!commodity!in!the!LME.!!
The!Chinese!steel!market!is!considered!a!good!indicator!of!economic!progress!because!
of!its!critical!role!played!in!infrastructure!and!overall!development.!China!has!never!had!
a!stronger!influence!on!the!steel!market!than!today.!However,!the!Chinese!steel!industry!
has!not!escaped!the!current!economic!downturn!and!recession.!At!the!end!of!2008,!the!
steel! industry! faced! a! sharp! downturn! that! led! to! many! cutbacks! of! investments.! The!
industry! has! responded! rapidly! with! production! cuts,! to! ensure! supply! matches!
demand.! The! Chinese! steel! industry! faces! issues! such! as,! sustainable! development!
(necessity!to!reduce!CO2!emissions),!government!intervention!and!the!global!economic!
crisis,!which!reduces!demand!and!therefore!leads!quickly!to!overcapacity.!Moreover,!the!
consolidation!of!the!industry!will!lead!to!reduction!in!workforce!in!the!next!years.!
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Abbreviations(
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SHME!!
LME!
COMEX/NYMEX!
EU!
GDP!
GNP!
OECD!
FTA!
LTO!
WSA!
GSSA!
SWOT!
WTO!
SOE!
VAT!
Shanghai!Metal!Exchange!
London!Metal!Exchange!!
Commodity!Exchange!Division!of!the!New!York!Mercantile!Exchange!
European!Union!
Gross!Domestic!Product!
Gross!National!Income!
Organization!for!Economic!Coeoperation!and!Development!
Free!Trade!Agreement!
LongeTerm!Orientation!
World!Steel!Association!
Global!Steel!Sectoral!Approach!
Strength!Weakness!Opportunities!Threats!
World!Trade!Organization!!
State!Owned!Enterprise!
Value!Added!Tax!
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4!
1 Introduction(
Steel!is!closely!linked!with!the! rise!of!modern!societies,!and!therefore!the!value!of!the!
metal!grows!with!the!development!of!emerging!countries.!Indeed,!steel!is!essential!for!
economic! growth,! as! it! is! primarily! used! for! infrastructure,! transport,! energy! delivery,!
housing!and!construction.!Factors!such!as!mine!supply!growth,!the!development!of!new!
technologies,!and!the!general!health!of!the!economy!have!a!direct!impact!on!the!market.!
The!recent!financial!crisis!has!given!unique!indicators!on!how!the!global!steel!industry!
reacts!in!a!period!of!economic!turbulences!and!recession.!!
China!has!never!had!stronger!influence!on!the!steel!market!than!today.!The!steel!market!
represents!nearly!15%!of!internationally!traded!raw!material.!The!oil!market!represents!
40%!but!the!steel!market!is!far!from!other!metals.!The!steel!market!has!been!neglected!
for! a! long! time! by! investors.! Many! reasons! can! explain! this:! unlike! other! basic! metal!
markets! (copper,! aluminum,! nickel),! the! steel! market! began! to! have! futures! contracts!
(available! on! the! LME)! only! as! of! 2008.! Moreover,! welding! has! been! considered! as! a!
dated!industry!by!many!investors!for!some!time.!
Everything! changed! with! the! new! 21st! century.! Today,! China! produces! and! consumes!
almost!50%!of!the!global!traded!volume!of!steel.!The!growing!demand!of!5e6%!during!
the!last!10!years!has!resolved!the!global!overcapacity!production!and!even!involved!lack!
of!raw!material.!!At!the!same!time,!the!industry!continued!concentrating!(ArceloreMittal!
fusion)! as! well! as! suppliers:! Vale! (Bresil)! BHP! Billition! (Australia)! and! Rio! Tinto!
(Australia),! which! represent! 60%! of! the! internationally! produced! steel.! This!
concentration! phenomenon! has! involved! a! constant! price! increase! during! the! last!
decade.!Thus,!the!transport!cost!has!also!grown,!which!explains!how!between!2002!and!
2008!the!steel!price!multiplied!by!five.!
During! the! second! semester! of! 2008,! the! market! collapsed! and! steel! lost! 70%! of! its!
value.! The! reason! for! such! a! loss! is! a! dramatic! diminution! of! demand! all! around! the!
world,! except! in! China! where! the! demand! continues! to! growth.! The! positive! effects! of!
government!stimulus!packages!will!slightly!affect!the!steel!industry,!explaining!why!the!
demand! kept! declining! in! 2009.! Other! raw! material! markets! suffered! from! the! same!
phenomenon! (diminution! of! 30e40%! on! average),! but! not! nearly! as! much! at! the! steel!
market.!The!rapid!decline!can!be!explained!by!the!power!of!the!international!oligopoly!
on!steel!and!the!continuously!stable!Chinese!demand.!
Based! on! the! aboveedescribed! facts,! this! assignment! aims! to! analyze! the! general!
perspectives!and!trends!of!the!Chinese!steel!industry;!in!order!to!help!a!potential!foreign!
investor! to! decide! its! investment! strategy! choices.! The! data! and! statistics! are! mainly!
collected!from!the!OECD!and!the!World!steel!in!figures!2009!from!the!WSA.!Regarding!
the!methodology!of!the!research,!several!tools!given!in!class!are!used,!such!as!the!SWOT!
analyze,!the!four!steps!screening!process!for!analyzing!international!opportunities,!the!
Michael! Porters! Five! Forces! Analysis! and! the! methodology! GO! GLOBAL! !
ClavelConsulting.!
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5!
2 Parameters(&(framework(conditions(
2.1 History(
Steel!is!an!alloy!of!iron!and!carbon.!Iron!is!found!on!the!earths!crust,!like!most!metals,!
only! in! the! form! of! an! ore,! which! can! still! be! found! in! abundance! around! the! globe.!
Evidence!of!the!first!production!of!high!carbon!steel!was!founded!in!India!around!300!
BC.!Modern!steelmaking!started!in!Europe!in!the!1600s!using!coke!instead!of!charcoal.!
Historically,!steel!and!iron!were!separate!products,!but!today!they!are!usually!classified!
in!the!same!entity!commonly!called!the!iron!and!steel!industry.!Today,!stronger!alloys!
and!lighter!metals!have!been!invented.!
The!Chinese!steel!market!has!been!going!through!big!changes!since!the!1970s.!China!has!
emerged!as!both!a!big!producer!and!consumer,!India!to!a!lesser!extent.!Consolidation!of!
the!industry!has!been!rapid!in!Europe!and!the!USA.!Given!the!importance!of!steel!for!the!
Chinese! strategy,! the! sector! has! been! long! controlled! by! SOEs.! The! following! figure!
compares!the!Chinese!crude!steel!production!and!the!annual!growth!trend!to!the!rest!of!
the!world.
(source!:!!Worldsteel!association)!
2.2 Strategic(position(and(major(economic(sectors(
Steel! is! the! basic! raw! material! for! economic! development.! Before! the! introduction! of!
modern! production! techniques,! it! was! considered! expensive! and! was! therefore! only!
used!when!no!cheaper!alternative!existed!(swords,!knives,!razors).!Today!steel!is!used!
widely! in! the! construction! of! roads,! buildings,! railways! and! other! infrastructures!
supported!by!a!steel!skeleton!(airports,!bridges,!skyscrapers,!etc.).!
The!iron!and!steel!industry!is!one!of!the!most!important!sectors!for!China,!representing!
around!7%!of!employment!in!the!country.!In!1996,!China!became!the!biggest!crude!steel!
producer.!Since!then,!the!growth!of!steel!production!has!been!globally!maintained.!!The!
expansion! of! the! demand! for! steel! paralleled! the! production! growth.! The! demand! has!
more! than! quadrupled! since! the! 1980s.! Chinas! steel! consumption! supassed! the! US! in!
2000,! to! become! the! largest! steel! market! in! the! world.! During! the! last! three! decades,!
Chinas! steel! industry! has! developed! a! large! structure! covering! sintering,! mining,! coke!
making,! scientific! research! and! engineering.! It! includes! companies,! manufacturer,!
distributer! steel,! including! plates,! sheets,! strips,! rods,! bars,! and! tubing.! Pig! iron! is! the!
!
08-Jun
6!
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main! raw! material! used! in! the! production! of! steel.! China! is! the! world's! largest! steele
producing!country!and!is!also!a!substantial!importer.!However,!Chinas!development!has!
been!slowed!down!by!the!existence!of!fragmented!small!producers,!which!has!resulted!
in!high!debts,!low!profitability!and!productivity.!In!addition!chronique!excess!of!loweend!
Steel-using
sectors
plunge
products! was! also! noted.!
On! the! other! hand,!
the! value! added!
products! (for! instance,!
stainless! steel!
or!
galvanised!
sheets)!
were!
not!
developed!
and!
instead!
were! imported.!
!"#$%#$&'$()'#**+,,-&.'(",/(%0'1/2#,/'34/'2-&(&*-("')4#*5
The!following!chart!shows!the!impact!of!the!global!financial!crisis!on!the!steelesector!in!
64/'2-&(&*-("')4#*5',/%+*/%'*(7-3("'(8(-"(1-"-30
China.!The!financial!shock!!reduced!capital!availability!and!caused!a!contraction!in!fixed!
9(+)-&.'('*#&3,(*3-#&'-&'2-:/%'())/3'-&8/)3;/&3
asset!investment.!That!being!said,!a!slight!slowdown!appeared!before!the!crisis.!
"#$%#$&'()*$+
!
"#
,-./012304-.
$%
56378.4389:
6.;4.6614.;
<20-=-04>6
$#
%
#
,-./2=61:
?218@96/
56089:A--?/
!%
!$#
!$%
!"#
"### "##$ "##" "##& "##' "##% "##( "##) "##* "##+
(source!:!World!steel!in!figures,!World&Steel&Association,!2009)!
2.3 Political(situation(and(legal(issues(
Steel!industry!was!delicensed!and!decontrolled!in!1992.!Some!actors!of!the!steel!market!
are!tempted!by!protectionism!(such!as!China),!which!can!lead!to!distorted!markets.!For!
instance,!in!March!2002!the!USA!placed!temporary!tariffs!on!imported!steel,!in!order!to!
protect!steel!makers.!The!EU!decided!that!it!would!impose!retaliatory!tariffs,!risking!a!
trade!war.!In!2002,!the!WTO!came!out!against!the!steel!tariffs,!arguing!that!they!were!a!
violation!of!the!USAs!WTO!tarifferate!commitments.!This!example!shows!how!the!steel!
Global and regional apparent steel demand
market! is! closely! linked! to! diplomatic! relations! and! government! intervention,! both! of!
<"#1("')3//"'%/;(&%'+73+,&'/&%)'-&'34/'2-,)3'4("2'#2'=>>?
which!are!closely!used!by!China.!!
@/;(&%'7(,3-*+"(,"0'$/(5'-&'A#,34'B;/,-*(C'D+,#7/'(&%'
E(7(&
2.4 Cultural(aspect(
F#,/')3(1-"-30'-&')#;/'/;/,.-&.'/*#&#;-/)
Steel!will!continue!to!
play!a!key!role!in!the!metal!industry!in!the! future!years.!Indeed,!
F.?6G C"##(B$H$##D
54994-./
-E:=60143:0-..6/
steel!based!alloys!will!still!be!used!in!a!wide!range!of!applications!of!daily!life.!Plastics!
and!synthetics!may!potentially!replace!some!steelebased!product!in!the!next!years.!
$'#
$%##
-602
The! Chinese! steel! marked! is! closely! linked! with!

the! industrialization! of! the! country.!
$"#
$&##
Heavy! industries,! like! steel,! play! a! key! role! for! construction! and! development.! The!345
$##
$"##
Chinese!economy!has!grown!at!the!rate!of!around!9.5%!per!year!with!the!construction!
and!manufacturing!sector!booming!accordingly,!as!well!as!the!demand!for!steel!in!China!
$$##
*#
having! increased! considerably.! The! following! table! shows! the! major! player! in! the!78
$###
Chinese!steel!market:!
(#
+##
$'##
,)($+&-./(012
*##
#(B$ #(B" #(B& #(B' #)B$ #)B" #)B& #)B' #*B$ #*B" #*B& #*B' #+B$:
C6D
'#
#(B$ #(B" #(B& #(B' #)B$ #)B" #)B& #)B' #*B$ #*B" #*B& #*B' #+B$:
C6D
!
7!
!
!
The! industry! is! currently! showing! signs! of! consolidation,! due! to! mergers! and!
acquisitions.!However,!Chinas!steel!market!used!to!be!much!more!fragmented.!The!10!
leading!steelmakers!listed!above!represents!over!50%!of!the!countrys!total!output.!
2.5 Environment(
The! extraction,! transport! and! production! of! this! raw! material! have! an! impact! on! the!
environment.!Efficient!use!of!steel!is!critical!for!sustainable!development.!CO2!emissions!
in!the!steel!sector!are!primarily!the!result!of!burning!fossil!fuels!during!the!production!
of! iron! and! steel.! The! posteKyoto! negotiations! are! important! for! the! steel! industry,!
which! has! an! ambitious! program! for! every! steel! company! in! the! world! to! measure! its!
CO2!emissions.!Another!ecological!challenge!will!be!to!reduce!the!huge!consumption!of!
WORLDSTEEL FACT SHEET
electricity! needed! for! steel! production.! Otherwise,! steel! is! one! of! the! most! recycled!
materials! in! the! world.!
table!STEEL
shows!
the! recycled!
steel! consumption!
and! apparent!
TABLE 1:This!
RECYCLED
CONSUMPTION
AND APPARENT
DOMESTIC
1
domestic!supply!in!2008,!in!million!metric!tons.!
SUPPLY 2007, MILLION METRIC TONS (MMT)
ut needed for all steelmaking process routes.
w magnetic metals. It is easy to separate from

80% of post-consumer steel is recycled.1
ry rates are estimated at 85% for

automotive, 90% for machinery, and 50%
mestic appliances.1 Recycled steel supply is
of demand by 2012.5
can be collected from excess material

oundries (home scrap) or downstream
(industrial scrap) and from discarded
ap).
Recycled steel
consumption
Apparent domestic
supply
EU-27
115.6
117.8
Other Europe
25.3
10.9
CIS
50
58.2
NAFTA
81.3
96.1
Central/South America
14.3
14.4
Asia
189.2
172.8
World
481.9
478.9
(source!:!!Worldsteel!association)
!
FIGURE 2: RECYCLED
STEEL USE IN STEELMAKING
me and industrial scrap is closely related to

production levels while the
of
2.6availability
(Production(process(
ly related to levels of past steel production,
Modern!steelmaking!began!with!the!Bessemer!process!introduced!in!1858,!used!directly!
and efficient recycling programmes.
with!pig!iron!as!the!raw!material.!This!was!the!first!inexpensive!industrial!process!for!
with 90 to 100% of recycled steel, Basic

the! cheap! masseproduction! of! steel! from! molten! pig! iron.! In! the! 1950s,! this! technique!
h up to 30% (see Figure 2).7
was!rendered!obsolete!by!the!LinzeDonawitz!process!of!basic!oxygen!steelmaking,!which!
tly for different qualities. Inlimited!impurities.!Consequently,!this!technique!uses!a!lot!of!electricity!(about!440!kWh!

2008 (May-July)
lting steel scrap (HMS) reached US$520/t
per!metric!ton).!The!following!table!shows!that!China!uses!massively!the!basic!oxygen!
prices reached US$600/t.6
technique.!
ecycled steel appears to be limited only by

not the processing capacity in the worlds
1).1
ement of natural resources
y efficient in its use of raw materials with

Key contributing factors include high
y-product recycling and steel recycling.
Steel recycling
o-waste, with current material

efficiency
!
ecycling and use of by-products from
n some countries.1
their lightweight potential, durability and recyclability. At the end of

a products life, steels 100% recyclability ensures that the resources
invested in its production are not lost and can be infinitely reused.
Steel products naturally contribute to resource conservation through
8!
!
Crude steel production by process and region 2008
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2.7 Product(specificities(
Crude steel production by process 2008

Key!
raw! material! inputs! needed! in! steelmaking! include! iron! ore,! coal,! limestone,! and!
recycled!steel.!Iron!ore!is!one!of!the!most!abundant!metallic!elements.!Coal!is!also!a!key!
dvlf {|jhq xuqdfh
material!in!steel!productions.!Another!major!feature!is!the!continuous!improvement!of!
ohfwulf uf xuqdfh
steel!grades.!Indeed,!50%!of!todays!steel!grades!were!not!available!ten!years!ago.!
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3 Analysis(
08
3.1
Economic(analysis(
Because! steel! is! an! input! in! almost! all! construction! projects,! the! demand! tends! to! rise!
when!there!is!a!construction!upturn!in!main!consuming!countries.!Also,!in!a!period!of!a!
slack!demand!(such!as!the!mide1980s!and!1998e2002!and!2009e?)!there!is!an!excess!of!
production! over! final! demand,! which! results! in! an! overload! of! stock.! This! abundance!
makes!these!this!markets!rather!different!than!other!perishable!commodities.!In!order!
to! moderate! price! fluctuation,! the! Chinese! stocks! and! inventories! are! built! up! when!
demand!is!low!and!run!down!when!it!is!high.!
Domestic steel prices by selected regions
The! following! table! shows! the! domestic! steel! prices! by! selected! regions! and! how! the!
!"#$%&%$'()*+,&'&)*-#.%*('/&)*,)&*+&01/2&34456&#)$&'7$%',$&,/.8'/&
Chinese! market!
has! slightly! resisted! better! than! international! competitors.! After!
9%*($&."&-#$$/&)'-&:$(/*+$:&$'()&;.+#)&-*+($&#)$+6&'+:&*+&<'2&
reaching! a!
historical! high! in! July! 2008,! the! average! global! price! of! steel! has! declined!
each! month! since! then,! and! in! May! 2009! reached! a! level! that! is! 55%! lower! than! last!
Julys!peak.!
0*123+()*4+ '"",5%""
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!
!
!
9!
The! steel! market! is! often! considered! as! being! an! indicator! of! economic! progress,!
because! of! its! critical! role! played! in! infrastructures! and! overall! development.! The!
volume!of!steel!consumed!is!a!good!barometer!to!measure!development!and!economic!
progress,!as!it!is!a!basic!raw!material.!The!intense!use!of!steel!relates!to!the!demand!and!
consumption! in! economic! activity.! When! less! developed! regions! expand! their!
infrastructure,!the!price!of!steel!goes!up.!Indeed,!this!raw!material!is!an!input!into!major!
industries!in!main!countries!worldwide.!!
3.2 Position(of(the(Chinese(steel(market(in(international(trade(
Steel! is! a! commodity! like! any! other! in! the! global! economy,! and! is! traded! between!
producers! and! consumers.! Price! regulation! of! iron! &! steel! was! abolished! in! 1992,! and!
since!then,!steel!prices!are!determined!by!the!interplay!of!market!forces.!The!producers!
sell!their!actual!or!next!production!to!customers,!who!transform!the!metals!into!alloys!
or!shapes,!in!order!to!allow!downstream!fabricators!to!transform!them!into!several!ende
use! products.! The! settlement! price! is! important! to! consider! for! the! present! day! (spot!
price)!or!for!in!the!future.!In!2008,!steel!started!to!be!traded!as!a!commodity!in!the!LME.!
In!order!to!fix!a!price!in!the!future!and!to!provide!a!hedge!against!price!variations,!the!
exchange!also!provides!futures!and!option!contracts.!!
3.3 Macroeconomic(parameters((
The!demand!of!steel!boomed!in!2004e2005!due!to!strong!Chinese!demand!and!general!
economic!upturn!worldwide.!Since!2000,!several!Indian!and!Chinese!steel!firms!entered!
the! market,! such! as! Shagang! Groupe,! Shangai! Baosteel! Groupe! and! Tata! Steel! (which!
bought!Cornus!Group!in!2007).!ArcelorMittal,!a!multinational!corporation!is!the!worlds!
largest!steel!producer.!China!is!the!top!producer!or!steel!with!about!30%!of!the!global!
market.!In!the!1970s,!China!adopted!a!new!policy!of!economic!reforms,!which!resulted!
in!an!annual!increase!of!output!of!major!steel!products!(particularly!pronounced!during!
the! 1990s).! The! Chinese! steel! industry! was! the! fastest! growing! in! the! world! over! the!
past!two!decades.!The!Chinese!government!has!a!macro!control!policy,!which!directs!the!
development!of!China's!steel!industry.!Most!of!the!country's!biggest!companies!are!now!
stateeowned!enterprises.!The!chart!below!shows!the!impact!of!government!intervention!
on!the!market.!(source!:!!Worldsteel!association)!
!
10!
!
3.4 Business(structures(usually(used(
The! mine! supply! growth,! technological,! economical! and! societal! factors! are! related! to!
the!supply!and!demand!of!steel.!When!an!area!needs!more!steel,!new!plants!and!mines!
are!built!and!existing!ones!expanded.!In!times!of!market!surplus,!the!current!operations!
are!scaled!back!or!even!closed!down,!and!expansions!are!delayed!or!canceled.!
WORLD STEEL TRADE BY AREA

MAJOR IMPORTERS AND
3.5 Major(trading(partners((overall(world(exports(&(imports(
2007
EXPORTERS
The! following! table! shows! the! world!
steel! trade! by! area.! The! Chinese!
steel!OF
is!STEEL
mainly!
2007
traded!in!Asia.!
million metric tons
million metric tons

Rank
Other Europe
127.7
4.6
15.9
1.9
2.1
0.6
11.1
0.4
4.8
0.2 169.3
41.6
10.8
0.1
9.3
0.0
0.1
0.0
0.6
0.1
0.3
0.0
21.3
21.3
CIS
1.8
2.6
9.7
0.0
0.5
0.0
1.5
0.1
0.3
0.0
16.6
6.9
NAFTA
6.4
0.2
2.5
16.7
4.4
0.2
4.5
2.6
4.6
0.3
42.4
25.7
Other America
Africa
1.3
4.2
0.0
0.2
1.8
4.7
1.3
0.2
4.6
0.5
0.1
2.2
2.0
1.9
0.5
0.4
0.7
1.1
0.0
0.0
12.3
15.3
7.7
13.2
Middle East
3.7
4.0
12.3
0.2
0.2
2.5
8.6
1.3
4.0
0.0
36.7
34.2
China
1.2
0.0
1.4
0.2
0.0
0.1
6.2
8.1
0.0
17.2
17.2
Japan
0.1
0.0
0.0
0.0
0.0
0.0
0.9
3.7
0.0
4.8
4.8
Other Asia
4.4
0.0
8.9
1.1
2.1
0.6
34.6
23.6
19.8
0.5
95.5
75.7
0.4
2.8
2.5
Oceania
0.3
0.0
0.0
0.0
0.0
0.0
0.6
0.5
1.0
Total Exports
161.8
11.6
66.4
21.7
14.4
6.4
66.4
35.6
48.5
1.5 434.3 250.7
of which:
extra-regional
exports*
34.1
11.6
56.7
5.0
9.8
1.7
66.4
35.6
28.7
1.1 250.7
Net Exports
(exports - imports)
-7.5
-9.7
49.8 -20.7
2.1 -45.7
49.2
30.9 -47.0
Total Exports
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
of which: extra-regional imports
Total Imports
Oceania
Other Asia
Japan
China
Africa and Middle East
Other America
NAFTA
CIS
Other Europe
Destination
European
Union (25)
European Union (25)
Exporting
Region
Rank
* - excluding intra-regional trade marked
66.4
35.6
34.1
30.3
29.9
29.4
26.6
18.3
18.2
17.9
11.1
10.7
10.4
9.8
9.5
8.0
7.0
6.9
6.8
6.6
Net Exports
(exports - imports)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
-1.4
China
Japan
European Union (27) 1
Ukraine
Germany 2
Russia
Belgium - Luxembourg 2
South Korea
France 2
Italy 2
Taiwan, China
Netherlands 2
Brazil
United States
United Kingdom 2
Spain 2
Austria 2
Turkey
Canada
India
Rank
China
Japan
Ukraine
Russia
Brazil
Austria 2
South Africa
Germany 2
Slovakia 2
Netherlands 2
Taiwan, China
Kazakhstan
Venezuela
Moldova
Total Imports
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Rank
49.2
30.9
28.1
22.1
8.8
7.4
2.8
2.5
2.4
2.3
1.9
1.9
1.2
0.7
0.6

United States
Germany 2
South Korea
Italy 2
France 2
China
Spain 2
Turkey
Iran
Thailand
United Kingdom 2
Taiwan, China
Netherlands 2
Viet Nam
Poland 2
Canada
India
Russia
41.6
27.7
27.4
26.2
24.6
19.2
18.1
17.2
15.0
13.5
12.2
9.8
9.3
9.2
8.8
8.5
8.0
8.0
7.7
7.3
Net Imports
(imports - exports)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
United States
Iran
Viet Nam
South Korea
Spain 2
Thailand
Italy 2
United Arab Emirates
Turkey
Saudi Arabia
Indonesia
Hong Kong, China
Philippines
Poland 2
17.9
11.7
8.3
7.9
7.5
7.1
7.0
6.7
6.6
6.6
4.2
4.2
3.7
3.4
3.1
Excluding intra-regional trade

2
Data for individual European Union (27) countries include intra-European trade
1
China! has! recently! become! a! net! exporter! of! steel,! meaning! that! China! also! reached! a!
level! of! production! saturation! and! its! steel! industry! needs! to! be! consolidated! and!
reorganized!in!coming!years!rather!than!having!an!expansion.!
24
3.6 Market(facts(&(figures(
25
China! has! significantly! reduced! its! steel! imports! since! the! 1990s,! but! its! size! in! world!
markets! still! is! of! key! importance.! Therefore,! the! determination! of! the! demand,! price!
volatility! and! substitution! elasticity! in! the! Chinese! steel! market! can! provide! exporters!
with! a! good! base! for! developing! strategies.! Like! other! markets,! which! have! a! perfect!
competitive!structure,!there!is!a!homogenous!product!and!the!global!price!is!determined!
by!the!supply!and!demand.!The!steel!market!is!in!perfect!competition,!because!there!are!
very!large!producers!and!consumers.!However,!the!global!market!is!large,!compared!to!
the!output!of!even!the!biggest!company!(each!firm!is!a!priceetaker).!Thus,!steel!can!be!
produced!in!many!parts!of!the!globe.!!
!
!
!
!
11!
3.7 Extent(of(international(integration(
New! steel! futures! contracts! introduced! in! 2008! in! the! LME! have! filled! an! information!
gap!and!extend!the!international!integration!of!the!steel!market.!However,!some!major!
producers! have! said! that! industry! consolidation! is! a! better! way! forward! than! futures!
contracts,! which! enables! the! steel! industry! to! hedge! against! volatility! in! steel! prices.!
China! is! a! member! of! the! WTO! and! therefore! has! an! obligation! to! liberalize! its! steel!
market,! which! should! result! in! a! consolidation! effect! in! the! sector.! In! 1992,! China!
abolished!the!license!and!quota!controls!over!its!steel!imports!and!eliminated!the!none
tariff! barriers! on! steel! imports! in! 2006.! However,! the! government! has! taken! some!
protectionist!measures!due!to!the!recent!economic!crisis.!
!
4 Potential(outcomes(
!
This! paper! aims! to! help! an! investor! looking! for! opportunities! in! the! Chinese! steel!
market.! Based! on! the! information! available! in! this! document,! he! would! be! able! to!
compare!the!several!steel!markets!and!make!a!decision!for!an!investment!according!to!
his! needs.! The! Chinese! steel! market! is! attractive! on! a! longeterm! basis,! due! to! the! new!
derivates!available!on!the!LME!and!the!particular!low!prices.!!
Moreover,!China!has!a!population!of!1.3!billion!and!the!per!capita!steel!consumption!is!
less!than!other!developed!countries.!Another!global!trend!to!consider!about!the!Chinese!
steel!market!is!that!it!will!probably!be!staggering!for!the!next!years.!Indeed,!China!has!
slowly! increased! steel! production! during! the! past! years,! and! yet! the! country! has! also!
imported!steel.!It!is!only!today!that!China!has!become!a!net!exporter!of!steel.!This!means!
that! China! is! also! slowly! reaching! a! level! of! production! saturation! allowing! its! steel!
industry! to! enter! a! phase! of! consolidation! and! reorganization! (a! necessary! step! for!
market! maturity,! which! older! markets! like! the! US! and! EU! have! already! experienced)!
rather!than!new!expansion.!
!
!
12!
5 Personal(assessment(
!
The! SWOT! analysis! is! an! adequate! instrument! to! assess! the! global! and! local! Chinese!
steel!market!
!
SWOT%GLOBAL%STEEL%MARKET%
Strength%
Weakness%
e!Stability!in!some!emerging!economies!
e!Strong!CO2!emissions!measures!!
e!Global!policy!&!perspective!(GSSA)!!
e! The! economic! crisis! has! pushed! the!

industry!into!recession!
e! Construction! sector! accounts! for! half! of!
world!demand!
e! Will! demand! go! down! when! the! stimulus!
ends?!!
Threats%
Opportunities%
e!Exportefacilitating!measures!
e!Nonetariff!barriers!in!emerging!Asia!
eModern! steelmaking! with! advanced!
technologies!
e! Overcapacity:! steelmaking! capacity!

continuing! to! increase! despite! market!
downturns!
e!
Uncertainties!
regarding!
public!
construction!activity!
!
SWOT%CHINESE%STEEL%MARKET%
Strength%
Weakness%
e!Consolidation!of!the!sector!
e!Cheap!labor!
e! Steel! state! owned! enterprises! slowly!
reformed! into! shareeholding! companies! or!
international!joint!ventures!
e!Exportefacilitation!measures !
e! Fragmented,! inefficient! and! overe

employed! industry! compared! to! Western!
counterparts!
e!Strong!government!intervention!
e!Imposition!of!VAT!export!rebate!on!certain!
flat!and!long!steel!product!(13%)!
e! Technology,! equipment,! product! variety!
and!quality!
!
Threats%
Opportunities%
e! Corporatization! of! steel! enterprises! and!
establishment! of! multiple! ownership!
structure!
e! Trade! liberalization! to! meet! WTOs!
requirement!
e!Tremendous!owned!steel!stocks!will!be!an!
advantage! for! an! upcoming! economic!
upturn!
!
!
!e!Elimination!of!nonetariff!barriers!on!steel!
imports!
e!Chinas!entry!into!the!WTO!in!2001!placed!
its! steel! sector! at! a! disadvantage! in!
international!competition!
e!Elimination!of!export!duties!on!certain!flat!
steel! products! (5%)! combined! with!
cancellation! of! steel! export! licensing!
requirements.!
!
13!
!
6 Prospects(
!
The! current! global! trend! in! China! is! a! consolidation! of! industry.! The! focus! is! on!
technological!improvement,!and!better!quality!products.!Currently,!the!industry!appears!
to!be!staggering,!but!considering!Chinas!population!of!1.3!billion!people,!the!per!capita!
steel!consumption!is!below!that!of!the!EU!or!the!USA,!suggesting!potential!growth!in!the!
upcoming!years.!Although!the!price!of!steel!was!growing!in!the!beginning!of!2010,!it!is!
hard! to! predict! the! future! of! the! market! due! to! uncertainties,! such! as! the! general!
demand!of!raw!material!during!an!upcoming!economic!upturn.!During!the!recent!crisis,!
which! involved! a! lack! of! demand,! producers! and! other! actors! stocked! the! exceeding!
supply! of! produced! steel! (overcapacity).! Predictably,! it! will! take! several! years! before!
this! overproduction! will! be! consumed,! with! consumption! leading! the! growth.! The!
following!chart!shows!the!apparent!steel!consumption!in!China!and!the!US!before!and!
Apparent steel consumption in
during!the!global!economic!crisis.!
08-Jun-09
China and the United States
!"#
##
#"
%&'()
!"#
./
0('123451)126
..
."
-
$#
,
$"
!#
!"
Another!uncertainty!of!the!final!price!of!Chinese!steel!is!related!to!the!price!of!other!raw!
materials! necessary! for! steel! production,! such! as! steel! ore,! which! represents! around!
30%! of! the! final! price! of! steel! produced! in! China.! The! price! of! related! raw! materials!
could! disturb! the! classic! annual! fixed! price! system! for! exportation.! All! of! these! factors!
may!involve!a!high!and!unusual!volatility!on!the!steel!market.!
!
Global and regional crude steel production
7 Conclusion(
!"##$%&'$$(%)*+#%,#-./#-%0."1."%(",023$4
The!longeterm!prospect!for!the!Chinese!steel!market!is!rather!good.!The!speed!of!growth!
5*1*/'"4%."'$'6*"'02%789%:;;<=>%?@A%7B!=C%?<A%7DB=C%EEA%7F*1*2=
has!undoubtedly!slowed!down!with!the!recent!global!economical!financial!crisis,!but!the!
G."1."%,'(#(%*3*'2%'2%(0&#%#&#,3'23%/0.2",'#(
industry! will! continue! to! grow! in! different! ways.! Capacity! expansion! will! continue! in!
C(32D 8/""*7.E.""9
:';;'<(6 <=4>21?'@41<((26
emerging!markets!and!all!sectors.!Steelmakers!in!rich!countries!will!maintain!their!shift!
8)((A);'B239
.$"
.#""
from!
volume! to! value.! Those! entire! factors! will!
make! the! Chinese! steel! industry! more!
)0+.$""
./"
competitive!and!will!reinforce!Chinas!ranking!in!the!worldwide!market.!!
.!""
.""
.-#+/
./""
)"*&+,Summing!
up,! as! the! steel! market! is! closely!
linked! to! the! economic! and! industrial!
,"
..""
345
development!worldwide,!it!will!benefit!from!the!global!economy!recovery,!which!should!
*"
."""
12
happen!in!the!year!2010.!In!conclusion,!the!Chinese!steel!industry!will!stay!attractive!to!
$%&#'()"*&+,-""
$"
investors!on!a!longeterm!basis!and!more!than!ever!before,!China!will!lead!the!price!on!
,""
/"
the! global!
steel!
market.!
The!
Chinese!
steel! industry!
will! face! environmental! issues! and!
"*7. "*7/ "*7!
"*7$ "+7.
"+7/ "+7! "+7$
",7. ",7/
",7! ",7$ "-7.4
"*7. "*7/ "*7! "*7$ "+7. "+7/ "+7! "+7$ ",7. ",7/ ",7! ",7$ "-7.4
829
829
the!sustainable!development!challenge!in!the!coming!years.!It!will!also!have!to!confront!
reduction!in!the!workforce,!resulting!in!a!less!laboreintensive!industry!than!it!used!to!be.!!
!
3
!
14!
Bibliography(
!
World!steel!in!figures,!World&Steel&Association,!2009,!ISSN!:!1379e9746,!27!p.!
La!tribune!des!mtaux,!Veron&&&Cie,!novembre!!dcembre!2009,!ESSN!1167.4849!
Safe!Sustnainable!Steel,!ArcelorMittal&Factbook&2008,&published!in!June!2009,!126!p.!
The! Chinese! Steel! Industry:! Government! Policy! and! Competitiveness! (PDF),! Pei& Sun,!
Routledge!2010,!ISBNe13:!978e0415418775,!256!p.!!
Chinas!Steel!Industry!e!Porters!Five!Forces!Strategy!Analysis!(PDF),!Aruvians&Rsearch,!
Marketresearch.com!(June!2009),!20!p.!
Economics! e! Eleventh! Edition,! Lipsey& && Chrystal,! Oxford! University! Press! 2007,! 665! p.,!
ISBN!978e0e19e928641e6!
La! Chine! influence! plus! que! jamais! le! march! de! lacier,! Eric! Louvet,! in! Le& Temps!
31.08.09!
%
Consulted%websites:%
http://www.trademap.org!(15.02.10)!
http://stats.oecd.org!(15.02.10)!
http://www.intracen.org!(15.02.10)!
http://stat.wto.org!(15.02.10)!
http://www.ft.com!(15.02.10)!
http://europe.wsj.com!(15.02.10)!
http://www.letemps.ch!(15.02.10)!
https://www.cia.gov/library/publications/theeworldefactbook!(15.02.10)!
%
Contacted%reference%of%expertise:%
Mr.!Eric!Louvet,!Senior!Advisor!Metals!&!Mining!BNP!Paribas!(Suisse)!SA,!Geneva.%
!
!
15!
Attachments(
!
Table%of%content%%
Apparent!steel!use!per!capita!2002!to!2008p.16!
Steel!consumption!by!region!2008....p.16!
Top!steeleproducing!producing!companies!2007!and!2008..p.17!
Major!steeleproducing!countries!2007!and!2008..p.17!
Steel!production!and!use:!Geographical!distribution!1998e2008...p.18!
Annual!steel!prices!Asiap.18!
!
16!
!
Statistics(&(tables(
!
APPARENT STEEL USE
2002 TO 2008
APPARENT STEEL USE PER CAPITA

2002 TO 2008
million metric tons finished steel products

2002
3.1
4.5
4.2
17.2
31.6
29.5
4.0
7.7
2.8
19.7
3.3
12.6
18.5
158.7
12.3
5.3
17.5
24.9
5.5
3.5
34.0
15.9
14.3
107.3
137.5
1.7
16.5
1.6
7.7
27.7
5.5
4.9
8.7
19.1
11.3
12.9
24.1
191.3
30.7
71.7
43.7
20.4
41.6
399.4
7.2
825.2
2004
3.1
4.0
4.4
15.6
31.9
31.8
3.4
7.3
3.1
21.0
3.6
12.3
18.5
160.1
14.6
5.3
19.9
25.3
6.4
0.7
37.0
15.5
14.9
100.8
131.3
2.8
16.0
1.5
7.1
27.6
4.2
4.1
10.0
18.3
14.7
14.2
28.9
240.5
33.1
73.4
45.4
19.9
41.9
454.2
7.5
884.7
3.3
4.8
5.2
16.7
36.3
33.2
3.5
8.5
3.3
21.1
4.0
13.2
19.5
172.4
16.2
6.4
22.6
26.3
5.8
0.8
38.1
17.4
16.0
117.4
150.8
3.6
18.3
2.4
8.6
33.0
3.8
4.9
11.1
19.9
14.5
15.2
29.8
275.8
35.3
76.8
47.2
22.1
45.8
503.0
8.0
977.6
kilograms finished steel products
2005
2006
2007
2008
3.5
4.6
5.2
14.8
35.3
31.6
3.6
8.4
3.5
20.9
4.1
11.4
18.6
165.5
18.5
6.6
25.1
29.3
5.6
0.8
41.5
16.8
16.1
105.4
138.3
3.7
16.8
2.7
9.1
32.5
5.0
4.7
11.9
21.5
15.6
17.9
33.5
340.2
39.9
76.7
47.1
19.9
50.2
574.1
7.9
1,040.0
4.1
4.1
4.0
5.5
5.8
5.6
6.0
6.6
6.5
16.2
16.6
15.3
39.2
42.7
41.5
36.6
36.6
34.3
3.5
3.5
3.2
10.7
12.1
11.4
4.2
5.1
4.3
23.6
24.5
19.6
4.5
4.8
4.9
12.9
12.7
11.7
21.7
23.0
20.0
188.6
198.1
182.1
21.3
23.6
21.3
7.7
8.0
7.6
28.9
31.6
28.9
34.9
40.4
35.4
6.7
8.3
6.9
1.0
1.3
1.3
48.9
56.6
49.9
18.1
15.5
15.0
18.0
17.8
17.3
119.6
108.0
97.5
155.7
141.3
129.7
4.5
4.6
4.8
18.5
22.1
24.0
3.1
4.0
3.3
10.1
11.0
12.1
36.4
41.9
44.4
4.6
5.5
6.5
6.0
6.0
6.1
12.2
13.6
13.5
22.9
25.1
26.2
14.6
16.1
15.6
20.3rqvwuxfwlrq
24.2
27.5
40.3
43.1
34.9xwrprwlyh
369.8
413.7
425.7
45.6klsexloglqj
49.5
52.6
77.3dfndjlqj
79.6
76.4
55.2
58.6
50.2 hfkdqlfdo
dqg
19.8
18.1
16.7
47.4lo dqg
55.2dv54.6
610.1
dlov671.3 684.6
8.6
9.2
7.9wkhuv
1,134.4 1,214.8 1,198.1
Steel Consumption and Markets
Steel consumption by end-user market in OECD*
2002
Austria
Belgium - Luxembourg
Czech Republic
France
Germany
Italy
Netherlands
Poland
Romania
Spain
Sweden
United Kingdom
Other EU (27)
European Union (27)
Turkey
Others
Other Europe
Russia
Ukraine
Other CIS
CIS
Canada
Mexico
United States
NAFTA
Argentina
Brazil
Venezuela
Others
Central and South America
Egypt
South Africa
Other Africa
Africa
Iran
Other Middle East
Middle East
China
India
Japan
Korea
qgxvwuldoSouth
pdfklqhu|
Taiwan, China
Other Asia
Asia
Australia and New Zealand
World
384.0
417.9
409.6
287.7
383.4
507.6
246.8
200.7
129.5
475.7
366.0
212.0
265.6
327.0
174.8
140.3
163.0
170.6
115.5
51.8
129.9
508.0
140.5
368.8
324.3
46.4
92.0
63.4
46.5
66.5
80.2
104.6
14.9
29.7
167.1
153.8
159.7
148.5
28.4
562.4
924.6
907.4
48.4
116.6
298.1
140.0
2003
382.1
375.1
432.7
259.2
386.6
545.7
210.3
190.6
141.1
497.8
398.0
206.3
265.5
328.6
205.3
141.3
183.6
174.2
134.7
27.8
141.9
490.4
145.7
343.2
306.8
74.8
87.8
57.3
42.5
65.3
59.5
87.3
17.7
28.1
216.1
165.3
187.7
185.4
30.1
575.2
955.4
878.4
48.0
131.0
308.3
148.4
2004
399.6
440.3
508.1
275.5
438.8
567.8
216.7
221.4
149.6
493.3
444.3
219.7
279.4
352.8
224.7
170.1
206.4
181.7
121.9
31.1
146.7
543.9
155.0
395.4
348.9
93.3
99.4
91.3
50.4
77.2
53.7
104.0
18.1
28.9
211.5
172.5
189.6
211.4
31.6
600.9
990.3
969.3
51.8
143.5
327.0
162.1
2005
419.4
423.6
513.7
243.4
426.6
538.8
221.9
219.2
161.8
481.8
453.8
189.4
265.6
337.5
254.1
174.1
227.4
203.2
118.5
30.4
160.2
521.9
154.0
351.4
316.9
95.5
90.0
101.0
52.8
74.8
68.2
97.6
19.9
31.5
225.4
197.1
209.3
259.1
35.2
599.9
984.4
869.7
56.0
162.0
321.2
170.7
2006
492.9
505.1
585.9
263.5
474.6
622.7
215.0
279.5
195.1
538.6
492.2
212.4
309.7
383.5
287.8
203.3
259.8
243.8
144.3
37.7
189.2
556.1
171.1
394.9
353.4
114.7
97.9
113.8
58.2
82.9
62.1
125.0
19.7
32.7
208.5
217.9
213.8
280.0
39.6
604.4
1 044.2
860.4
52.0
170.3
315.8
184.1
2007
495.7
530.6
644.6
269.6
517.2
621.6
211.5
316.5
235.5
552.6
531.6
209.1
328.2
401.9
314.6
214.3
281.6
283.4
179.7
47.4
219.6
471.7
167.3
353.1
317.4
116.9
115.2
143.9
62.4
94.1
72.4
123.3
21.8
35.3
226.1
253.9
242.0
311.4
42.4
622.0
1 144.8
780.1
59.7
185.4
340.7
195.1
2008
472.2
510.6
639.3
247.4
502.4
582.0
191.5
299.6
200.4
440.5
532.2
191.4
284.6
368.9
281.2
202.4
255.4
249.6
151.2
47.6
194.2
451.5
160.2
315.6
288.4
119.9
123.6
118.3
67.4
98.4
85.1
124.7
20.9
36.0
216.0
280.7
253.3
318.5
44.3
597.2
1 210.4
717.8
58.3
187.1
359.3
190.4
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Austria
Belgium - Luxembourg
Czech Republic
France
Germany
Italy
Netherlands
Poland
Romania
Spain
Sweden
United Kingdom
Other EU (27)
European Union (27)
Turkey
Others
Other Europe
Russia
Ukraine
Other CIS
CIS
Canada
Mexico
United States
NAFTA
Argentina
Brazil
Venezuela
Others
Central and South America
Egypt
South Africa
Other Africa
Africa

Iran
Other Middle East
Middle East
China
India
Japan
South Korea
Taiwan, China
Other Asia
Asia
and New Zealand
Australia
World
2003
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17
Steel consumption by region
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17!
!
TOP STEEL-PRODUCING COMPANIES

2007 AND 2008
MAJOR STEEL-PRODUCING COUNTRIES

2007 AND 2008
million metric tons crude steel production

2008
2007
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
103.3
37.5
35.4
34.7
33.3
33.0
27.7
24.4
23.3
23.2
21.8
20.4
20.4
19.2
17.7
16.9
16.0
15.9
15.0
14.1
13.7
12.2
12.0
11.3
11.3
11.0
10.4
10.0
1
2
5
4
NA
3
11
6
8
10
NA
12
13
15
17
14
NA
16
18
20
19
23
21
30
26
27
22
28
116.4
35.7
28.6
31.1
31.1
34.0
20.2
26.5
22.9
21.5
23.8
20.0
18.6
17.3
16.2
17.9
16.2
17.0
14.2
13.8
13.9
12.9
13.3
9.7
11.1
10.9
13.1
10.1
29
9.9
NA
11.6
30
31
32
33
34
35
36
37
38
39
40
9.9
9.8
9.2
9.0
8.2
8.2
8.1
8.0
7.5
7.5
7.4
29 10.0
34 8.8
31 9.3
33 9.0
32 9.1
37 8.1
38 8.1
35 8.7
45 6.6
50 6.2
NA 7.6
2008
ArcelorMittal
Nippon Steel1
Baosteel Group
POSCO
Hebei Steel Group
JFE
Wuhan Steel Group
Tata Steel 2
Jiangsu Shagang Group
U.S. Steel
Shandong Steel Group
Nucor
Gerdau
Severstal
Evraz
Riva
Anshan Steel
ThyssenKrupp 3
Maanshan Steel
Sumitomo Metal Ind
SAIL
Shougang Group
Magnitogorsk
Novolipetsk
Hunan Valin Group
China Steel Corporation
Techint 4
IMIDRO
Industrial Union
of Donbass
Hyundai Steel
Baotou Steel
Taiyuan Steel
Anyang Steel
Metinvest
Celsa
Kobe Steel
Usiminas
Panzhihua Steel
Rizhao Steel
Benxi Steel
million metric tons crude steel production

2007
Country
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
6.9
6.9
6.8
6.5
6.5
6.4
6.4
6.1
6.1
6.0
5.9
5.9
5.7
5.6
5.4
5.3
5.2
5.1
5.0
4.7
4.5
4.4
4.3
4.3
4.3
4.0
4.0
3.9
40
41
43
39
44
46
47
60
51
58
54
52
53
42
61
56
57
NA
59
63
68
72
62
69
65
71
70
64
7.4
7.3
6.9
7.8
6.8
6.4
6.4
5.2
6.1
5.4
5.9
6.1
6.0
7.0
5.0
5.6
5.5
4.5
5.3
4.6
4.4
4.0
5.0
4.1
4.5
4.1
4.1
4.6
Jiuquan Steel
Salzgitter 5
voestalpine
Jianlong Group
BlueScope
Metalloinvest
Beitei Steel
Guofeng Steel
SSAB
Erdemir
AK Steel
Mechel
Nanjing Steel
Ilyich
Tonghua Steel
Xinyu Steel
HKM 6
Sanming Steel
CSN
HADEED
Tianjin Tiantie Group
Hebei Jinxi Group
Steel Dynamics
Pingxiang Steel
Ezz Group
Nisshin
Tianjin Steel Pipe
Zaporizhstahl
69
3.8
NA
3.0 JSW Steel
70
71
72
73
74
75
76
77
78
79
80
3.7
3.7
3.7
3.6
3.6
3.5
3.5
3.4
3.4
3.4
3.1
73
75
NA
NA
78
NA
77
NA
74
79
NA
4.0
3.5
3.0
4.3
3.5
2.7
3.5
2.7
3.6
3.5
3.2
China
Japan
United States
Russia
India (e)
South Korea
Germany
Ukraine
Brazil
Italy
Turkey
Taiwan, China
Spain
France
Mexico
Canada
United Kingdom
Belgium
Iran
Poland
South Africa
Australia
Austria
Netherlands
Czech Republic
Egypt
Malaysia (e)
Argentina
Thailand (e)
Sweden
Romania
Saudi Arabia
Slovak Republic
Finland
Kazakhstan
Venezuela
Indonesia (e)
Luxembourg
Byelorussia
Greece
Viet Nam (e)
Hungary
Others
World
(e): estimate
Lion Group
AHMSA
ICDAS
SIDOR 6
Hangzhou Steel
Hebei Jingye Steel
Chongqing Steel
Commercial Metals
Essar Steel
Tokyo Steel
Vizag Steel
(1) - includes part of Usiminas

(2) - includes Corus
(3) - 50% of HKM included in ThyssenKrupp
(4) - includes partial tonnage of SIDOR
(5) - includes part of HKM
(6) - total production
2008
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
2007
500.5
118.7
91.4
68.5
55.2
53.6
45.8
37.1
33.7
30.6
26.8
19.9
18.6
17.9
17.2
14.8
13.5
10.7
10.0
9.7
8.3
7.6
7.6
6.9
6.4
6.2
6.1
5.5
5.5
5.2
5.0
4.7
4.5
4.4
4.3
4.2
3.6
2.6
2.6
2.5
2.2
2.1
24.3
1,326.5
1
2
3
4
5
6
7
8
9
10
11
12
14
13
15
16
17
18
20
19
21
22
23
24
25
28
26
31
30
29
27
35
32
36
34
33
37
38
40
39
42
41
494.9
120.2
98.1
72.4
53.1
51.5
48.6
42.8
33.8
31.6
25.8
20.9
19.0
19.2
17.6
15.6
14.3
10.7
10.1
10.6
9.1
7.9
7.6
7.4
7.1
6.2
6.9
5.4
5.6
5.7
6.3
4.6
5.1
4.4
4.8
5.0
4.0
2.9
2.4
2.6
2.0
2.2
24.3
1,351.3
NA: not applicable
!
!
18!
!
STEEL PRODUCTION AND USE:
GEOGRAPHICAL DISTRIBUTION
1998
STEEL PRODUCTION AND USE:

GEOGRAPHICAL DISTRIBUTION
2008
Production
Production
World total: 777 million metric tons crude steel

Others
8.9%
Other Asia
11.5%
Others comprise:
Africa
Middle East
Others
Other Asia 6.8%
11.2%
Japan
9.0%
EU (27)
24.6%
Japan
12.0%
CIS
9.5%
China
14.7%
World total: 1,327 million metric tons crude steel
Other Europe
2.2%
CIS
8.6%
NAFTA
9.3%
Others comprise:
Africa
Middle East
Central and South America 4.8 %

Australia and New Zealand 1.2 %
1.3%
1.3%
Central and South America 3.7%

Australia and New Zealand 0.6%
Use (finished steel products)
Use (finished steel products)
World total: 692 million metric tons
World total: 1,198 million metric tons
Others
9.8%
Others
10.2%
EU (27)
22.7%
Other Asia
13.9%
NAFTA
21.4%
China
16.0%
Others comprise:
Africa
Middle East
2.2%
2.4%
EU (27)
15.2%
Other Asia
15.2%
Other Europe
2.5%
CIS
3.5%
Japan
10.2%
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Other Europe
2.4%
China
37.7%
NAFTA
16.6%
1.6 %
1.2 %
EU (27)
14.9%
NAFTA
10.8%
Japan
6.4%
Other Europe
2.4%
CIS
4.2%
China
35.5%
Others comprise:
Africa
Middle East

2.2%
3.6%

Annual steel prices, Asia*

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The Chinese Steel Market: Perspectives and Strategies

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February(

The! Chinese! steel! marked! is! closely! linked! with!

ut needed for all steelmaking process routes.

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WORLD STEEL TRADE BY AREA

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* - excluding intra-regional trade marked

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e! The! economic! crisis! has! pushed! the!

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Global and regional crude steel production

APPARENT STEEL USE PER CAPITA

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Steel Consumption and Markets

Steel consumption by end-user market in OECD*

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MAJOR STEEL-PRODUCING COUNTRIES

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3.0 JSW Steel

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NA: not applicable

STEEL PRODUCTION AND USE:

World total: 777 million metric tons crude steel

World total: 1,327 million metric tons crude steel

Central and South America 4.8 %

Central and South America 3.7%

Use (finished steel products)

Use (finished steel products)

World total: 692 million metric tons

World total: 1,198 million metric tons

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