Market Structue Analysis of the Steel Industry

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  • Topic: Steel, Mittal Steel Company, Corus Group
  • Pages : 8 (3202 words )
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  • Published : November 27, 2008
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I. Introduction ......................................................................................1 1.1 What is Market Structure Analysis? ...........................................1 1.2 What is Steel? .............................................................................1 1.3 History of Steel ...........................................................................2 1.4 Early Market Structure of the Steel Industry ..............................2 1.5 Current Market Structure of the Steel Industry ...........................4 II. What caused the change? ..................................................................5 2.1 Demand and Supply ....................................................................5 2.2 China Effect ................................................................................5 2.3 Oligopoly ....................................................................................6 III. Company Profiles ............................................................................6 3.1 Arcelor Mittal .............................................................................6 3.2 Nippon Steel Corporation ...........................................................7 3.3 Shanghai Baosteel Group Corporation .......................................7 3.4 U.S Steel .....................................................................................7 3.5 Tata Steel ....................................................................................8 IV. Conclusion ......................................................................................8 4.1 What is the future? ......................................................................8 4.2 Alternatives ................................................................................9 Bibliography ........................................................................................10 Appendix 1 – Top Steel Producers ......................................................13 Appendix 2 – World Steel Data ...........................................................14 Appendix 3 – Steel Production and Consumption ...............................15

I. Introduction

1.1 What is Market Structure Analysis?

A market structure is a medium where firms operate and is determined by variables such as type of products or number of firms in the market. A market structure analysis, on the other hand, is a thorough evaluation of numerous characteristics defining a certain market. Number of economic units, product substitutability and freedom of entry and exit in the market are some key factors in conducting a market structure analysis (Lipsey & Chrystal 2007, p.138). The basic frameworks of a market structure are: Monopoly, Monopolistic Competition, Oligopoly and Perfect Competition (Lipsey & Chrystal, p.202). In this particular market structure of the steel industry, such frameworks will be present and different case studies will be performed. Thus, a general analysis of the steel industry will be carried out. 1.2 What is Steel?

Steel is a commodity that has a long history in the industrialized world. It retains a special place in the manufacturing world, in the sense that it is the major component in cars, buildings, tools and has various infrastructural uses. Chemically, it is an alloy of iron and carbon and it is casually combined with either chromium or nickel to solidify its state and increase its resistance from natural decay (Iron, Steel and Invar n.d.; Alloying of Steel n.d). Types of steel include carbon steel, alloy steel, stainless steel and tool steel (Iron&Steel n.d.).

Steel as a product is a very environment-friendly material. It is one of the most recycled materials in the industry, ¾ of which recycles annually, hence saving energy and reducing further excavations for iron (Facts and Figures n.d.).

1.3 History of Steel
As early as in the 17th century, modern steel was first processed...
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