Iron Ore and Chinese Steel Industry
FACTSHEET
Steel, aluminium and the carbon targets 2010—2050
The structure of the steel industry
The steel industry consists of a large number of producers with an international reach. In 2007, 1.34 bn t of steel were produced which, together with iron, accounted for 65% of the $1,594 billion global metals and mining market.
Iron Ore Mining Industry
Coke Direct Reduced Iron Pig Iron
Project finance, brokers, traders & exchanges Steel Industry
Secondary steel production EAF
Stockholders
Primary steel production BOF
Standardised steel products
Construction Industry Automotive Industry Railway Industry Shipbuilding Industry Chemical and Petroleum Plants Other
Specialist steel products
Finished products and equipment
B Equipment, transport Recycling Industry & support services
1 2 2 3 3
Figure 1 The steel supply chain
Since the invention of the Bessemer process in 1856, steel has become a choice building material across the globe, sought after for its advantageous qualities ‐ hardness, ductility, durability and tensile strength. As a result, demand for steel has became synonymous with industrial development, not least today, when the growth of the so‐called BRIC countries (Brazil, Russia, India and China) is by far the greatest influence on the market. particulars of the production process. Both steel and its majority input, iron ore, are produced in a highly capital‐intensive manner. Their production involves long lead times and increasingly continuous processes. The resultant rigidity in steel supply, coupled with the highly cyclical nature of steel demand, have meant that certain key decisions within the industry are made by coordinated, administrative processes as opposed to pure market forces. For example, iron ore prices are negotiated annually at meetings between the steel and the iron ore industry.
Steel, aluminium and the carbon targets 2010—2050
The structure of the steel industry
The steel industry consists of a large number of producers with an international reach. In 2007, 1.34 bn t of steel were produced which, together with iron, accounted for 65% of the $1,594 billion global metals and mining market.
Iron Ore Mining Industry
Coke Direct Reduced Iron Pig Iron
Project finance, brokers, traders & exchanges Steel Industry
Secondary steel production EAF
Stockholders
Primary steel production BOF
Standardised steel products
Construction Industry Automotive Industry Railway Industry Shipbuilding Industry Chemical and Petroleum Plants Other
Specialist steel products
Finished products and equipment
B Equipment, transport Recycling Industry & support services
1 2 2 3 3
Figure 1 The steel supply chain
Since the invention of the Bessemer process in 1856, steel has become a choice building material across the globe, sought after for its advantageous qualities ‐ hardness, ductility, durability and tensile strength. As a result, demand for steel has became synonymous with industrial development, not least today, when the growth of the so‐called BRIC countries (Brazil, Russia, India and China) is by far the greatest influence on the market. particulars of the production process. Both steel and its majority input, iron ore, are produced in a highly capital‐intensive manner. Their production involves long lead times and increasingly continuous processes. The resultant rigidity in steel supply, coupled with the highly cyclical nature of steel demand, have meant that certain key decisions within the industry are made by coordinated, administrative processes as opposed to pure market forces. For example, iron ore prices are negotiated annually at meetings between the steel and the iron ore industry.
References: Jong, 1993 26, 2000 (1947) 6