Steel Production

Steel Production

Brief Excerpt from Industry Overview Chapter:

Companies in this industry engage in converting pig iron to steel, making steel, and manufacturing steel shapes, pipes, and tubes. Major companies include Nucor and US Steel (both from the US), as well as ArcelorMittal (Luxembourg); China Baowu and HBIS Group (both from China); JFE and Nippon Steel (both from Japan), POSCO (South Korea), Tata Steel (India), and ThyssenKrupp (Germany).

COMPETITIVE LANDSCAPE

Demand comes largely from manufacturers of durable goods such as motor vehicles, machinery, containers, and construction steel. The profitability of individual companies depends on efficient operations, because most products are commodities sold based on price. Big companies enjoy significant economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products. The US industry is highly concentrated: the 50 largest companies generate more than 95% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include carbon steel, finished, strip, hot rolled which account for about 15% of the industry revenue. Sheet and strip, galvanized, hot dipped, cold rolled carbon steel sheet and strip, and hot rolled alloy steel sheet and strip each account for about 10% of the industry. Other products include alloy steel (excluding stainless) accounts for about 5% of the revenue.