Steel Production

Companies in this industry engage in converting pig iron to steel, making steel, and manufacturing steel shapes, pipes, and tubes. Major companies include Nucor and US Steel (both from the US), as well as ArcelorMittal (Luxembourg); China Baowu and HBIS Group (both from China); JFE and Nippon Steel (both from Japan), POSCO (South Korea), Tata Steel (India), and ThyssenKrupp (Germany).

The global steel industry produces about 1.8 billion metric tons in 2023, according to Statista. China is by far the largest steel maker. China produces more steel than the next six largest steel making countries combined. Other top steel producers include India, Japan, the US, and Russia.

The US steel production industry includes about 300 companies with combined annual revenue of about $90 billion.

COMPETITIVE LANDSCAPE

Demand comes largely from manufacturers of durable goods such as motor vehicles, machinery, containers, and construction steel. The profitability of individual companies depends on efficient operations, because most products are commodities sold based on price. Big companies enjoy significant economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products. The US industry is highly concentrated: the 50 largest companies generate more than 95% of revenue.

Steel imports make up nearly 30% of the US market. Canada, Brazil, South Korea, Russia, and Mexico are top suppliers. Exports, mainly to Canada, Mexico, and China, account for about 15% of US production.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include carbon steel, finished, strip, hot rolled which account for about 15% of the industry revenue. Sheet and strip, galvanized, hot dipped, cold rolled carbon steel sheet and strip, and hot rolled alloy steel sheet and strip each account for about 10% of the industry.

Companies are involved in three major types of activities. Primary processing is the separation of iron from ores in a furnace to produce slabs or ingots of iron. Secondary processing involves mainly the rolling or drawing of steel slabs into sheets, plates, rods, strips, bars, and wire. Foundry operations produce steel shapes by pouring molten metal into casts or molds. Some producers have fully integrated operations, from mining iron ore to manufacturing finished products, but most engage in just one type of activity.

Steel production first involves converting iron ore or scrap iron into molten steel. The ore-based process uses a blast or oxygen furnace in a blast mill, and the scrap-based process uses an electric arc furnace in a mini-mill. Next, molten steel is poured and solidified in a continuous caster to produce semi-finished products, like steel slabs, billets, and blooms. These materials are put through a mechanical and heat treatment known as hot rolling, and some hot-rolled sheets are rolled again at lower temperatures (cold rolling) to form finished flat products such as plates, coils, or sheets, or long products such as wire, bars, rails, or beams. These products may then be coated with protective anticorrosion material.

Primary production of steel requires large amounts of ore and large amounts of energy, so producers often locate near ore deposits or coal fields. To ensure a supply of raw materials, many primary producers control their own ore deposits. Finished products typically are transported by rail. Show more