Iron Ore and Chinese Steel Industry

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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.



References: Jong, 1993 26, 2000 (1947) 6

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