The Powerhouses of Global Steel Production

English: A view of the former Bethlehem Steel from the Fahy Bridge in Bethlehem, Pennsylvania. This photo was taken shortly before demolition began to make way for the Sands BethWorks casino project. Jschnalzer 23:29, 31 July 2007 (UTC) (Photo credit: Wikipedia)

This article takes a look at some of the principal producers of steel across the world and how the profile of the global industry is evolving, with focus moving to the East, both in terms of production and consumption.

In the latter stages of the 20th century, through to the present day, there has been a shift in emphasis within the steel producing industry, from the old powerhouses of Europe, where production has dropped significantly since the 1970s, to the new manufacturing hubs of Asia, with their vast natural resources - including of course the iron ore and fossil fuels required to produce steel. As the industry has become more efficient and reliant on mechanical processes the number of individuals employed by producers has dropped but this effect has been more pronounced in these old powerhouses, demonstrating the relative scaling back of operations. For example, in the EU, employment dropped by 72% between 1974 and 2000, from 996,000 employees to 278,000; whilst in the US it was down by 71% from 521,000.

The following lists the top 3 steel producers in the world using 2012 output figures from the World Steel Association and highlights the changing landscape of the industry.

China

China has emerged as, by a distance, the largest producer of steel across the globe accounting for a whopping 46.3% of the world’s annual production in 2012, according to the World Steel Association. Most countries, witnessed a dip in 2009 due to the economic difficulties but China’s output marched on regardless, rising by 221.6 million tonnes between 2007 and 2012 - a margin in itself double the total level of output of the next main producer Japan. China’s output of 716.5 million tonnes in 2012 was over 4 times that of the entire European Union put together, and over 8 times that of the US. The UK, who sit 18th on the list of global suppliers, meanwhile have an annual output of a mere 9.8 million tonnes, just 1/73 of China’s.

The eastern superpower also claimed to be the top steel exporter in 2011, although not by the same margin due to the size of their internal market and consumption. In total, 47.9 million tonnes left the country in 2011 however due to China’s aforementioned demand for the raw material and their consequent imports of foreign steel, the country slips to 2nd when it comes to the top net exporters, behind Japan.

Japan
In contrast to China, the output from Japan has actually dropped a little in the last 5 years (-11%) but it remains the second highest producing country in its own right (the EU collectively has a higher output), producing around 107 million tonnes. However, Japan does almost catch China when it comes to the amount of that steel that is exported rather than earmarked for internal consumption (40.7m tonnes) and indeed takes top spot as the highest net exporter in the world, above its neighbour. As well as having slightly lower levels of steel imports than China, Japan exports a far higher proportion of its output, around 38% in comparison with China’s 7%.

United States
The US has slipped to 3rd in the pecking order, and, similar to Japan, has been hit by the recession with production levels almost halving between 2007 and 2009, before rallying in 2012 to sit just 10% below 2007’s levels. With output of 88.6 million tonnes in the last year it seems inevitable that the US will be caught and overtaken by India in the next few years as their steel output sits just 12 million tonnes behind, having risen by 43% in the last five years.

Due to the scale of manufacture in the US, the superpower consumes most of its steel internally and thus, as well as sitting far down the table of exporters, holds the position of the worlds primary importer of steel, both in sheer numbers and when offset against their own exports. Only the EU (thanks primarily to Germany) as a collective can claim to import more of the world’s steel than the US.

In summary the global steel markets are witnessing the US and EU moving away from production and instead relying on imports, particularly from Asia, to meet their high levels of demands. China meanwhile, has taken on the role of the industry's megalith, with almost unparalleled natural resources and driven by the need to meet both global demand alongside the manufacturing and building demands of its own mammoth population and internal markets.

To find out more about the state of the global steel industry you can visit this organisation who trades in steel.

The Indian Economy - A Quick Profile

GDP (Gross Domestic Product) PPP (Purchasing Power Parity) per capita in the world. (Photo credit: Wikipedia)

Alongside those of Brazil, Russia, China and South Africa, the Indian economy forms BRICS, the group of nations with the fastest growing economies in the world. These nations represent the next generation of economic superpowers, however, India and China in particular are already establishing themselves amongst the largest and most potent industrial powers on the planet.

The Statistics
The considered size of the Indian economy varies depending on which metric is used to gauge it. According to the latest measurements of Gross Domestic Product - a reading of the output of a nation’s workforce - it is currently the ninth largest economy in the world. Moreover, when the figures are adjusted to take into account the true value of wealth in each country and the Purchasing Power Parity variant of GDP (GDP PPP) is used, India’s economy can already be considered as the third largest on the world stage. There is a real disparity however between this collective strength and the prosperity of individuals within the country. When these measurements are looked at per capita, they show that India’s population sit (on average) outside of the top one hundred wealthiest and so, in fact, can be considered one of the poorest populations despite the fact that recent economic success has doubled the hourly wage in last decade.

Growth in the Indian economy has really surged following the liberalisation of trade and employment rules in the early 1990s and a subsequent shift towards more capitalist sensibilities. These policies have essentially unlocked the country’s extensive natural resources, space and land as well as a relatively inexpensive labour force (the second largest work force in the world) who are consequently becoming better educated and more affluent. What’s more this affluent population are, in turn, increasing the size of the internal consumer market and the resultant growth in the Indian economy from all of these factors is now averaging around 7.5% a year.

Economic Sectors
Many in the West may envisage that India’s economy is mostly made up of large manufacturing industries or large scale agriculture. These sectors do play an important role in India’s prosperity, particularly agriculture which accounts for 28% of the nation’s output; making use of the vast tracts of land to produce arable crops. Manufacturing and industry however, perhaps surprisingly, only accounts for 18% of the country’s output despite the fact that some of India’s most prominent businesses and global names operate in these markets as, for example, steel suppliers or car manufacturers. India is indeed the second largest growing car producer in the world and still acts as a major (and growing) force in manufacturing and industry on the world stage.

The dominant sector in the Indian economy, as it tends to be in western economies, is the service sector, accounting for 54% of GDP. The most familiar element of that sector to us in the UK may well be the Indian call centre. Over the last few years, countless European and American businesses have spotted the opportunities to move their support services across to India to take advantage of the lower labour costs, good communications infrastructure and educated talent pool for whom English is a prevalent language. However, India is also a leading light in the information technology industries, proving a real challenger to the US as the global player for third party IT services; not to mention possessing established and well developed financial services and banking industries.

For some, the growth in economies across Asia, particularly those of China and India mean that can be considered the right time to investigate investment opportunities, such as Asian Investment Funds, whilst the European investment markets continue to suffer the effects of the recent economic troubles. The Indian economy is certainly on course to become, if it isn't already, one of the most prominent in world trade.

© Stuart Mitchell 2012