the chinese steel market: perspectives and strategies

7/28/2019 The Chinese steel market: perspectives and strategies

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ASSIGNMENT:!INTERNATIONAL!MANAGEMENT !

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Subject!area!!! ! ! ! ! Chinese!steel!market!analysis!

! ! ! ! ! ! Trends!in!the!Chinese!steel!industry!! ! ! ! ! ! Perspectives!&!strategies!for!China!

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Project!supervisor!! ! ! ! Prof.!Dr.!Paul!Meyer!

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Submitted!by!! Alain!Mermoud! !! [email protected]!

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Date!! 15.02.10!

February(

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The(Chinese(steel(market:(perspectives(and(strategies(

(Picture!:!http://www.chinadaily.com.cn)!


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The!Chinese!steel!market:!perspectives!and!strategies!

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Alain!Mermoud!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!MSc!BA!2010!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!15!February!2010!

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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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Executive(summary(!

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(!

SHME!! Shanghai!Metal!Exchange!

LME! London!Metal!Exchange!!

COMEX/NYMEX! Commodity!Exchange!Division!of!the!New!York!Mercantile!Exchange!

EU! European!Union!

GDP! Gross!Domestic!Product!

GNP! Gross!National!Income!

OECD! Organization!for!Economic!Cooperation!and!Development!

FTA! Free!Trade!Agreement!

LTO! LongTerm!Orientation!WSA! World!Steel!Association!

GSSA! Global!Steel!Sectoral!Approach!

SWOT! Strength!Weakness!Opportunities!Threats!

WTO! World!Trade!Organization!!

SOE! State!Owned!Enterprise!

VAT! Value!Added!Tax!


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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!56%!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!(ArcelorMittal!

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!3040%!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! abovedescribed! 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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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!


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main! raw!material!used!in! the! production!of! steel.! China! is! the!world's! largest! steelproducing!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!lowend!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.!The!following!chart!shows!the!impact!of!the!global!financial!crisis!on!the!steelsector!in!

China.!The!financial!shock!!reduced!capital!availability!and!caused!a!contraction!in!fixed!

asset!investment.!That!being!said,!a!slight!slowdown!appeared!before!the!crisis.!

!(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!tariffrate!commitments.!This!example!shows!how!the!steel!market! is! closely!linked! to!diplomatic! relations!and! government! intervention,!both!of!

which!are!closely!used!by!China.!!

2.4 Cultural(aspect(Steel!will!continue!to!play!a!key!role!in!the!metal!industry!in!the!future!years.!Indeed,!

steel!based!alloys!will!still!be!used!in!a!wide!range!of!applications!of!daily!life.!Plastics!

and!synthetics!may!potentially!replace!some!steelbased!product!in!the!next!years.!

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!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!

Chinese!steel!market:!

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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! postKyoto! 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!

electricity! needed! for! steel! production.! Otherwise,! steel! is! one! of! the! most! recycled!materials!in!the!world.!This!table!shows!the!recycled!steel!consumption!and!apparent!

domestic!supply!in!2008,!in!million!metric!tons.!

!(source!:!!Worldsteel!association)!

2.6 (Production(process(Modern!steelmaking!began!with!the!Bessemer!process!introduced!in!1858,!used!directly!with!pig!iron!as!the!raw!material.!This!was!the!first!inexpensive!industrial!process!for!

the!cheap!massproduction!of!steel!from!molten!pig!iron.!In!the!1950s,!this!technique!

was!rendered!obsolete!by!the!LinzDonawitz!process!of!basic!oxygen!steelmaking,!which!

limited!impurities.!Consequently,!this!technique!uses!a!lot!of!electricity!(about!440!kWh!

per!metric!ton).!The!following!table!shows!that!China!uses!massively!the!basic!oxygen!

technique.!

Recycled steelconsumption

Apparent domesticsupply

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


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2.7 Product(specificities(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!

material!in!steel!productions.!Another!major!feature!is!the!continuous!improvement!of!

steel!grades.!Indeed,!50%!of!todays!steel!grades!were!not!available!ten!years!ago.!

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3 Analysis(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!mid1980s!and!19982002!and!2009?)!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.!

The! following!table!shows! the! domestic!steel!prices!by!selected! regions!and!how! the!

Chinese! market! has! slightly! resisted! better! than! international! competitors.! After!

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.!

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Crude steel production by process and region 2008

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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!end

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!20042005!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!

stateowned!enterprises.!The!chart!below!shows!the!impact!of!government!intervention!

on!the!market.!(source!:!!Worldsteel!association)!

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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.!

3.5 Major(trading(partners((overall(world(exports(&(imports(The! following! table!shows!the!world!steel! trade! by!area.! The! Chinese!steel! is!mainly!

traded!in!Asia.!

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(source!:!World!steel!in!figures,!World&Steel&Association,!2009)!

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.!

3.6 Market(facts(&(figures(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!pricetaker).!Thus,!steel!can!be!

produced!in!many!parts!of!the!globe.!!

!

!

Exporting

Region

Destination EuropeanUnion(25)

OtherEurope

CIS

NAFTA

OtherAmerica

AfricaandMiddleEast

China

Japan

OtherAsia

Oceania

TotalImports

ofwhich:extra-regionalimports

EuropeanUnion (25)

127.7 4 .6 15 .9 1.9 2 .1 0. 6 11.1 0 .4 4 .8 0. 2 16 9.3 41.6

Other Europe 10.8 0.1 9.3 0.0 0.1 0.0 0.6 0.1 0.3 0.0 2 1.3 2 1.3

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 4 2.4 2 5.7

Other America 1.3 0.0 1.8 1.3 4.6 0.1 2.0 0.5 0.7 0.0 1 2.3 7.7

Africa 4.2 0.2 4.7 0.2 0.5 2.2 1. 9 0. 4 1.1 0 .0 15 .3 13 .2

Middle East 3 .7 4 .0 1 2. 3 0. 2 0 .2 2.5 8 .6 1. 3 4 .0 0 .0 3 6. 7 34 .2

China 1.2 0.0 1.4 0. 2 0.0 0.1 - 6 .2 8 .1 0 .0 17. 2 1 7. 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 3 4.6 2 3.6 19.8 0 .5 95 .5 75.7

Oceania 0.3 0.0 0.0 0.0 0.0 0.0 0.6 0.5 1.0 0.4 2 .8 2 .5

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*

3 4.1 11. 6 5 6 .7 5 .0 9 .8 1. 7 6 6 .4 3 5. 6 2 8 .7 1.1 2 50 .7

Net Exports

(exports - imports)-7.5 -9.7 49.8 -20.7 2.1 -45.7 49.2 30.9 -47.0 -1.4

* - excluding intra-regional trade marked

million metric tons

Rank Total Exports

1 China 66.4

2 Japan 35.6

3 European Union (27)1 34.1

4 Ukraine 30.3

5 Germany2 29.9

6 Russia 29.4

7 Belgium - Luxembourg2 26.6

8 South Korea 18.3

9 France2 18.2

10 Italy2 17.9

11 Taiwan, China 11.1

12 Netherlands2 10.7

13 Brazil 10.4

14 United States 9.8

15 United Kingdom2 9.5

16 Spain2 8.0

17 Austria2 7.0

18 Turkey 6.9

19 Canada 6.8

20 India 6.6

Rank Total Imports



3 Germany2 27.4

4 South Korea 26.2

5 I taly2 24.6


7 France2 18.1

8 China 17.2

9 Spain2 15.0

10 Turkey 13.5

11 Iran 12.2

12 Thailand 9.8

13 United Kingdom2 9.3


15 Netherlands2 8.8

16 Viet Nam 8.5

17 Poland2 8.0

18 Canada 8.0

19 India 7.7

20 Russia 7.3

Rank Net Exports

(exports - imports)

1 China 49.2

2 Japan 30.9

3 Ukraine 28.1

4 Russia 22.1

5 Brazil 8.8


7 Austria2 2.8

8 South Africa 2.59 Germany2 2.4

10 Slovakia2 2.3

11 Netherlands2 1.9


13 Kazakhstan 1.2

14 Venezuela 0.7

15 Moldova 0.6

Rank Net Imports

(imports - exports)


2 Iran 11.7

3 Viet Nam 8.3

4 South Korea 7.9


6 Spa in2 7.1

7 Thailand 7.0

8 I taly2

6.79 Un it ed A ra b E mi ra te s 6 .6

10 Turkey 6.6

11 Saudi Arabia 4.2

12 Indonesia 4.2

13 Hon g Kong , C hin a 3.7

14 Philippines 3.4

15 Poland2 3.1

million metric tons


11/18


!


!

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!non

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!longterm!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.!


12/18


!


!

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%

!Stability!in!some!emerging!economies!

!Strong!CO2!emissions!measures!!!Global!policy!&!perspective!(GSSA)!!

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

industry!into!recession!! Construction! sector! accounts! for! half! of!

world!demand!

!Will!demand!go!down!when!the!stimulus!

ends?!!

Opportunities% Threats%

!Exportfacilitating!measures!!Nontariff!barriers!in!emerging!Asia!

Modern! steelmaking! with! advanced!

technologies!

! Overcapacity:! steelmaking! capacity!continuing! to! increase! despite! market!

downturns!

! Uncertainties! regarding! public!construction!activity!

!

SWOT%CHINESE%STEEL%MARKET%

Strength% Weakness%

!Consolidation!of!the!sector!!Cheap!labor!

! Steel! state! owned! enterprises! slowly!

reformed! into! shareholding! companies! or!

international!joint!ventures!!Exportfacilitation!measures!

! Fragmented,! inefficient! and! overemployed! industry! compared! to! Western!

counterparts!

!Strong!government!intervention!

!Imposition!of!VAT!export!rebate!on!certain!flat!and!long!steel!product!(13%)!

! Technology,! equipment,! product! variety!

and!quality!

!

Opportunities% Threats%

! Corporatization! of! steel! enterprises! and!

establishment! of! multiple! ownership!structure!

! Trade! liberalization! to! meet! WTOs!

requirement!!Tremendous!owned!steel!stocks!will!be!an!

advantage! for! an! upcoming! economic!

upturn!

!!

!!Elimination!of!nontariff!barriers!on!steel!

imports!!Chinas!entry!into!the!WTO!in!2001!placed!

its! steel! sector! at! a! disadvantage! in!

international!competition!!Elimination!of!export!duties!on!certain!flat!

steel! products! (5%)! combined! with!

cancellation! of! steel! export! licensing!

requirements.!


13/18


!


!

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!

during!the!global!economic!crisis.!

!


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.!

!

7 Conclusion(The!longterm!prospect!for!the!Chinese!steel!market!is!rather!good.!The!speed!of!growth!

has!undoubtedly!slowed!down!with!the!recent!global!economical!financial!crisis,!but!the!industry!will!continue!to!grow! in! different!ways.! Capacity! expansion!will!continue!in!

emerging!markets!and!all!sectors.!Steelmakers!in!rich!countries!will!maintain!their!shift!

from!volume!to!value.!Those!entire!factors!will!make!the!Chinese!steel!industry!more!

competitive!and!will!reinforce!Chinas!ranking!in!the!worldwide!market.!!

Summing! up,! as! the! steel! market! is! closely! linked! to! the! economic! and! industrial!

development!worldwide,!it!will!benefit!from!the!global!economy!recovery,!which!should!happen!in!the!year!2010.!In!conclusion,!the!Chinese!steel!industry!will!stay!attractive!to!

investors!on!a!longterm!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!

the!sustainable!development!challenge!in!the!coming!years.!It!will!also!have!to!confront!

reduction!in!the!workforce,!resulting!in!a!less!laborintensive!industry!than!it!used!to!be.!!

!"

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14/18


!


!

14!

Bibliography(

!

World!steel!in!figures,!World&Steel&Association,!2009,!ISSN!:!13799746,!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,!ISBN13:!9780415418775,!256!p.!!

Chinas!Steel!Industry!!Porters!Five!Forces!Strategy!Analysis!(PDF),!Aruvians&Rsearch,!

Marketresearch.com!(June!2009),!20!p.!

Economics!!Eleventh!Edition,!Lipsey&&Chrystal,!Oxford!University!Press!2007,!665!p.,!

ISBN!9780199286416!

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/theworldfactbook!(15.02.10)!

%

Contacted%reference%of%expertise:%

Mr.!Eric!Louvet,!Senior!Advisor!Metals!&!Mining!BNP!Paribas!(Suisse)!SA,!Geneva.%


15/18


!


!

15!

Attachments(

!

Table%of%content%%

Apparent!steel!use!per!capita!2002!to!2008p.16!

Steel!consumption!by!region!2008....p.16!

Top!steelproducing!producing!companies!2007!and!2008..p.17!

Major!steelproducing!countries!2007!and!2008..p.17!

Steel!production!and!use:!Geographical!distribution!19982008...p.18!

Annual!steel!prices!Asiap.18!


16/18


!


!

16!

Statistics(&(tables(

!

!


!

!

APPARENT STEEL USE PER CAPITA

2002 TO 2008

kilograms finished steel products

APPARENT STEEL USE

2002 TO 2008

2002 2003 2004 2005 2006 2007 2008

Austria 3.1 3.1 3.3 3.5 4.1 4.1 4.0

Belgium - Luxembourg 4.5 4.0 4.8 4.6 5.5 5.8 5.6

Czech Republic 4.2 4.4 5.2 5.2 6.0 6.6 6.5

France 17.2 15.6 16.7 14.8 16.2 16.6 15.3

Germany 31.6 31.9 36.3 35.3 39.2 42.7 41.5

Italy 29.5 31.8 33.2 31.6 36.6 36.6 34.3

Netherlands 4.0 3.4 3.5 3.6 3.5 3.5 3.2

Poland 7.7 7.3 8.5 8.4 10.7 12.1 11.4

Romania 2.8 3.1 3.3 3.5 4.2 5.1 4.3

Spain 19.7 21.0 21.1 20.9 23.6 24.5 19.6

Sweden 3.3 3.6 4.0 4.1 4.5 4.8 4.9

United Kingdom 12.6 12.3 13.2 11.4 12.9 12.7 11.7

Other EU (27) 18.5 18.5 19.5 18.6 21.7 23.0 20.0

European Union (27) 158.7 160.1 172.4 165.5 188.6 198.1 182.1

Turkey 12.3 14.6 16.2 18.5 21.3 23.6 21.3

Others 5.3 5.3 6.4 6.6 7.7 8.0 7.6

Other Europe 17.5 19.9 22.6 25.1 28.9 31.6 28.9

Russia 24.9 25.3 26.3 29.3 34.9 40.4 35.4

Ukraine 5.5 6.4 5.8 5.6 6.7 8.3 6.9

Other CIS 3.5 0.7 0.8 0.8 1.0 1.3 1.3

CIS 34.0 37.0 38.1 41.5 48.9 56.6 49.9

Canada 15.9 15.5 17.4 16.8 18.1 15.5 15.0

Mexico 14.3 14.9 16.0 16.1 18.0 17.8 17.3

United States 107.3 100.8 117.4 105.4 119.6 108.0 97.5

NAFTA 137.5 131.3 150.8 138.3 155.7 141.3 129.7

Argentina 1.7 2.8 3.6 3.7 4.5 4.6 4.8

Brazil 16.5 16.0 18.3 16.8 18.5 22.1 24.0

Venezuela 1.6 1.5 2.4 2.7 3.1 4.0 3.3

Others 7.7 7.1 8.6 9.1 10.1 11.0 12.1

Central and South America 27.7 27.6 33.0 32.5 36.4 41.9 44.4

Egypt 5.5 4.2 3.8 5.0 4.6 5.5 6.5

South Africa 4.9 4.1 4.9 4.7 6.0 6.0 6.1

Other Africa 8.7 10.0 11.1 11.9 12.2 13.6 13.5

Africa 19.1 18.3 19.9 21.5 22.9 25.1 26.2

Iran 11.3 14.7 14.5 15.6 14.6 16.1 15.6

Other Middle East 12.9 14.2 15.2 17.9 20.3 24.2 27.5

Middle East 24.1 28.9 29.8 33.5 34.9 40.3 43.1

China 191.3 240.5 275.8 340.2 369.8 413.7 425.7

India 30.7 33.1 35.3 39.9 45.6 49.5 52.6

Japan 71.7 73.4 76.8 76.7 77.3 79.6 76.4

South Korea 43.7 45.4 47.2 47.1 50.2 55.2 58.6

Taiwan, China 20.4 19.9 22.1 19.9 19.8 18.1 16.7

Other Asia 41.6 41.9 45.8 50.2 47.4 55.2 54.6

Asia 399.4 454.2 503.0 574.1 610.1 671.3 684.6

Australia and New Zealand 7.2 7.5 8.0 7.9 7.9 8.6 9.2

World 825.2 884.7 977.6 1,040.0 1,134.4 1,214.8 1,198.1

2002 2003 2004 2005 2006 2007 2008

Austria 384.0 382.1 399.6 419.4 492.9 495.7 472.2

Belgium - Luxembourg 417.9 375.1 440.3 423.6 505.1 530.6 510.6

Czech Republic 409.6 432.7 508.1 513.7 585.9 644.6 639.3

France 287.7 259.2 275.5 243.4 263.5 269.6 247.4

Germany 383.4 386.6 438.8 426.6 474.6 517.2 502.4

Italy 507.6 545.7 567.8 538.8 622.7 621.6 582.0

Netherlands 246.8 210.3 216.7 221.9 215.0 211.5 191.5

Poland 200.7 190.6 221.4 219.2 279.5 316.5 299.6

Romania 129.5 141.1 149.6 161.8 195.1 235.5 200.4

Spain 475.7 497.8 493.3 481.8 538.6 552.6 440.5

Sweden 366.0 398.0 444.3 453.8 492.2 531.6 532.2

United Kingdom 212.0 206.3 219.7 189.4 212.4 209.1 191.4

Other EU (27) 265.6 265.5 279.4 265.6 309.7 328.2 284.6

European Union (27) 327.0 328.6 352.8 337.5 383.5 401.9 368.9

Turkey 174.8 205.3 224.7 254.1 287.8 314.6 281.2

Others 140.3 141.3 170.1 174.1 203.3 214.3 202.4

Other Europe 163.0 183.6 206.4 227.4 259.8 281.6 255.4

Russia 170.6 174.2 181.7 203.2 243.8 283.4 249.6

Ukraine 115.5 134.7 121.9 118.5 144.3 179.7 151.2

Other CIS 51.8 27.8 31.1 30.4 37.7 47.4 47.6

CIS 129.9 141.9 146.7 160.2 189.2 219.6 194.2

Canada 508.0 490.4 543.9 521.9 556.1 471.7 451.5

Mexico 140.5 145.7 155.0 154.0 171.1 167.3 160.2

United States 368.8 343.2 395.4 351.4 394.9 353.1 315.6

NAFTA 324.3 306.8 348.9 316.9 353.4 317.4 288.4

Argentina 46.4 74.8 93.3 95.5 114.7 116.9 119.9

Brazil 92.0 87.8 99.4 90.0 97.9 115.2 123.6

Venezuela 63.4 57.3 91.3 101.0 113.8 143.9 118.3

Others 46.5 42.5 50.4 52.8 58.2 62.4 67.4

Central and South America 66.5 65.3 77.2 74.8 82.9 94.1 98.4

Egypt 80.2 59.5 53.7 68.2 62.1 72.4 85.1

South Africa 104.6 87.3 104.0 97.6 125.0 123.3 124.7

Other Africa 14.9 17.7 18.1 19.9 19.7 21.8 20.9

Africa 29.7 28.1 28.9 31.5 32.7 35.3 36.0

Iran 167.1 216.1 211.5 225.4 208.5 226.1 216.0

Other Middle East 153.8 165.3 172.5 197.1 217.9 253.9 280.7

Middle East 159.7 187.7 189.6 209.3 213.8 242.0 253.3

China 148.5 185.4 211.4 259.1 280.0 311.4 318.5

India 28.4 30.1 31.6 35.2 39.6 42.4 44.3

Japan 562.4 575.2 600.9 599.9 604.4 622.0 597.2

South Korea 924.6 955.4 990.3 984.4 1 044.2 1 144.8 1 210.4

Taiwan, China 907.4 878.4 969.3 869.7 860.4 780.1 717.8

Other Asia 48.4 48.0 51.8 56.0 52.0 59.7 58.3

Asia 116.6 131.0 143.5 162.0 170.3 185.4 187.1

Australia and New Zealand 298.1 308.3 327.0 321.2 315.8 340.7 359.3

World 140.0 148.4 162.1 170.7 184.1 195.1 190.4

million metric tons finished steel products

Steel consumption by region

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17/18


!


!

17!

!


!

MAJOR STEEL-PRODUCING COUNTRIES

2007 AND 2008

million metric tons crude steel production

Country 2008 2007

China 1 500.5 1 494.9

Japan 2 118.7 2 120.2

United States 3 91.4 3 98.1

Russia 4 68.5 4 72.4

India (e) 5 55.2 5 53.1

South Korea 6 53.6 6 51.5

Germany 7 45.8 7 48.6

Ukraine 8 37.1 8 42.8

Brazil 9 33.7 9 33.8

Italy 10 30.6 10 31.6

Turkey 11 26.8 11 25.8

Taiwan, China 12 19.9 12 20.9

Spain 13 18.6 14 19.0

France 14 17.9 13 19.2

Mexico 15 17.2 15 17.6

Canada 16 14.8 16 15.6

United Kingdom 17 13.5 17 14.3

Belgium 18 10.7 18 10.7Iran 19 10.0 20 10.1

Poland 20 9.7 19 10.6

South Africa 21 8.3 21 9.1

Australia 22 7.6 22 7.9

Austria 23 7.6 23 7.6

Netherlands 24 6.9 24 7.4

Czech Republic 25 6.4 25 7.1

Egypt 26 6.2 28 6.2

Malaysia (e) 27 6.1 26 6.9

Argentina 28 5.5 31 5.4

Thailand (e) 29 5.5 30 5.6

Sweden 30 5.2 29 5.7

Romania 31 5.0 27 6.3

Saudi Arabia 32 4.7 35 4.6

Slovak Republic 33 4.5 32 5.1

Finland 34 4.4 36 4.4

Kazakhstan 35 4.3 34 4.8

Venezuela 36 4.2 33 5.0

Indonesia (e) 37 3.6 37 4.0

Luxembourg 38 2.6 38 2.9

Byelorussia 39 2.6 40 2.4

Greece 40 2.5 39 2.6

Viet Nam (e) 41 2.2 42 2.0

Hungary 42 2.1 41 2.2

Others 24.3 24.3

World 1,326.5 1,351.3

(e): estimate

TOP STEEL-PRODUCING COMPANIES

2007 AND 2008

million metric tons crude steel production

2008 2007 2008 2007

1 103.3 1 116.4 ArcelorMittal 41 6.9 40 7.4 Jiuquan Steel

2 3 7. 5 2 3 5 .7 N ip po n S te el1 42 6.9 41 7.3 Salzgitter5

3 35.4 5 28.6 Baosteel Group 43 6 .8 43 6 .9 voestalpine

4 34.7 4 31.1 POSCO 44 6.5 39 7.8 Jianlong Group

5 33.3 NA 3 1.1 Hebei Steel Group 45 6.5 44 6.8 BlueScope

6 33.0 3 34.0 JFE 46 6.4 46 6.4 Metalloinvest

7 2 7. 7 11 20. 2 W uhan St eel G roup 47 6. 4 47 6. 4 B ei tei St eel

8 2 4. 4 6 2 6. 5 Ta ta S te el2 4 8 6.1 6 0 5. 2 G uofeng St eel

9 23.3 8 22.9 Jiangsu Shagang Group 49 6.1 51 6.1 SSAB

10 23.2 10 21.5 U.S. Steel 50 6.0 58 5.4 Erdemir

11 2 1. 8 NA 2 3. 8 S hand ong S teel Gr ou p 51 5. 9 5 4 5. 9 A K S teel

12 20.4 12 20.0 Nucor 52 5.9 52 6.1 Mechel

13 20.4 13 18.6 Gerdau 53 5.7 53 6.0 Nanjing Steel

14 19.2 15 17.3 S everstal 54 5.6 42 7.0 I lyich

15 17.7 17 16.2 Evraz 55 5.4 61 5.0 Tonghua Steel

16 16.9 14 17.9 Riva 56 5.3 56 5.6 Xinyu Steel

17 16.0 NA 16.2 A nshan Steel 57 5.2 57 5.5 HKM6

18 15 .9 16 17.0 ThyssenKrupp3

5 8 5.1 N A 4. 5 S anmi ng S teel19 15.0 18 14.2 Maanshan Steel 59 5.0 59 5.3 C SN

20 14.1 20 13.8 Sumitomo Metal Ind 60 4.7 63 4.6 HADEED

21 13.7 19 13.9 S AIL 61 4.5 68 4.4 T ianjin Tiantie Group

22 12.2 23 12.9 Shougang Group 62 4.4 72 4.0 Hebei Jinxi Group

23 12.0 21 13.3 Magnitogorsk 63 4.3 62 5.0 S teel Dynamics

24 11.3 30 9.7 Novolipetsk 64 4.3 69 4.1 Pingxiang Steel

25 11.3 26 11.1 Hunan Valin Group 65 4.3 65 4.5 Ezz Group

2 6 11. 0 2 7 10 .9 C hi na S teel C or po ra ti on 6 6 4 .0 7 1 4 .1 N is sh in

27 10.4 22 13.1 Techint4 6 7 4. 0 7 0 4.1 T ian jin S teel P ip e

28 10.0 28 10.1 I MIDRO 68 3.9 64 4.6 Z aporizhstahl

29 9.9 NA 11.6Industrial Union

of Donbass69 3.8 NA 3.0 JSW Steel

30 9.9 29 10.0 Hyundai Steel 70 3.7 73 4.0 Lion Group

31 9.8 34 8.8 B aotou Steel 71 3.7 75 3.5 A HMSA

32 9.2 31 9.3 Taiyuan Steel 72 3.7 NA 3.0 I CDAS

33 9.0 33 9.0 A nyang Steel 73 3.6 NA 4.3 S IDOR6

34 8.2 32 9.1 Metinvest 74 3.6 78 3.5 Hangzhou Steel

35 8.2 37 8.1 Celsa 75 3.5 NA 2.7 Hebei Jingye Steel

36 8.1 38 8.1 K obe Steel 76 3.5 77 3.5 C hongqing Steel

37 8.0 35 8.7 U siminas 77 3.4 NA 2.7 C ommercial Metals38 7.5 45 6.6 Panzhihua Steel 78 3.4 74 3.6 Essar Steel

39 7.5 50 6.2 R izhao Steel 79 3.4 79 3.5 Tokyo Steel

40 7.4 NA 7.6 B enxi Steel 80 3.1 NA 3 .2 V izag 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

NA: not applicable


18/18


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STEEL PRODUCTION AND USE:

GEOGRAPHICAL DISTRIBUTION

2008

Production

Use (finished steel products)

World total: 1,327 million metric tons crude steel

Others comprise:

Africa 1.3%

Middle East 1.3%

Central and South America 3.7%

Australia and New Zealand 0.6%

Others comprise:

Africa 2.2%

Middle East 3.6%



STEEL PRODUCTION AND USE:

GEOGRAPHICAL DISTRIBUTION

1998

Others comprise:

Africa 1.6 %

Middle East 1.2 %

CIS

3.5%

Other Europe

2.5%

China

16.0%

NAFTA

21.4%

Japan

10.2%

Other Asia

13.9%

EU (27)

22.7%

Others

9.8%

CIS

4.2%

Other Europe

2.4%

China

35.5%

NAFTA

10.8%Japan6.4%

Other Asia

15.2%

EU (27)

15.2%

Others

10.2%

CIS

9.5%

Other Europe

2.2%

China

14.7% NAFTA

16.6%

Japan

12.0%

Other Asia

11.5%

Others

8.9% EU (27)

24.6%

CIS

8.6%

Other Europe

2.4%

China

37.7%

NAFTA

9.3%

Japan

9.0%

Other Asia

11.2%

EU (27)14.9%

Others

6.8%

Use (finished steel products)

World total: 777 million metric tons crude steel

Production

Central and South America 4.8 %

Australia and New Zealand 1.2 %

Others comprise:

Africa 2.2%

Middle East 2.4%



World total: 692 million metric tons World total: 1,198 million metric tons

Annual steel prices, Asia*

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the chinese steel market: perspectives and strategies

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