Steel is one of the least consolidated major global industries and despite the massive rise in Chinese steel production, not much has changed in 10 years.
Platts recently published its “Top 20” global steelmakers of 2014 and noted that the 633 million metric tons produced by this group represented only 38% of the world total.
A look back at 2004 showed that the Top 20 produced 403.4 million mt and that amounted to 37.7% of the world’s production.
A 0.3 percentage point gain is nothing to brag about, especially considering the other huge changes that have taken place in global steel in the ensuing 10 years.
Last year, 10 of the Top 20 mills were China-based, together producing about 300 million mt, nearly half of the group’s total. In 2004, only two Chinese mills were in the Top 20.
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Total Chinese crude steel production in 2014 was 823 million mt, nearly 50% of total global output of 1.66 billion mt. In 2004 – the first year the global steel industry produced more than 1 billion mt – China produced 273 million mt, or roughly 27% of the world total.
ArcelorMittal, the world’s most active consolidator and by far the world’s largest steelmaker, produced 93.1 million mt last year, but that was less than 6% of the world total. Nippon Steel & Sumitomo Metal, another consolidator of sorts, was a distant second at 47.5 million mt produced.
In 2004, ArcelorMittal predecessor Arcelor was No. 1 with 46.9 million mt produced. Second at 42.8 million mt was LNM Holdings, predecessor of Mittal Steel and ultimately ArcelorMittal.
The USA had two mills in the Top 20 last year, Nucor, ranked 13th with 21.4 million mt of production, and US Steel, ranked 15th with 19.7 million mt.
There were also two Japanese mills in the Top 20, Nippon and JFE (9th at 31.4 million), and two Korean producers, Posco (5th with 37.7 million mt) and Hyundai Steel (14th with 20.5 million mt).
Back in 2004 when there were only two Chinese mills in the Top 20, Russia, Japan and the US each had three steelmakers on the list.
The missing US mill in 2014 is International Steel Group (ISG), which consolidated America’s historical No. 2 and No. 3 producers, Bethlehem Steel and LTV Steel, both of which had filed for bankruptcy.
ISG was purchased by Mittal Steel, which became ArcelorMittal, North America’s largest steelmaker.
And, though ArcelorMittal may be number one in terms of production, the sheer number of current producers means market domination for any single, or leading group of players is a long, long way off.
Ultimately, consolidation can be considered a good thing when an industry is so fractured, mostly for producers. But, let’s not forget that consumers can also benefit from reduced price volatility, fewer unfair trade cases, and greater supply stability in general.
The post Not so amalgamated steel: Top 20 producers account for only 38% of global production appeared first on The Barrel Blog.