Mergers, Takeovers, Demand, and Technology Drive Top Ten Global Steelmakers

---

Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). When Mittal Steel (NYSE:MT) (London, UK/Rotterdam, The Netherlands) announced the finalization of its $4.5 billion purchase of International Steel Group (ISG) (Richfield, Ohio) in mid-April, the company became the world's number one steel producer, with a total capacity worldwide of 60 million tons per annum. It pushed Arcelor (Xetra:AEX) (Luxembourg), the reigning leader, into the number two spot. Arcelor's total capacity is rated at forty million tons globally. Both Mittal steel and Arcelor have announced record profits for the first quarter of 2005, riding on higher steel prices in world markets.

Another steelmaker whose profits have boomed is Nucor (NYSE:NUE) (Charlotte, North Carolina) with earnings up from $62.8 million in 2003 to $1.1 billion in 2004. Nucor is now placed at the number ten spot globally. The company has also pursued an acquisitive strategy, but with a different mix to the large-scale voracity of Mittal. In the 1960's, Nucor employed a then experimental technology using electric arc furnaces to melt scrap metal. Scrap is a much cheaper feedstock than iron ore. Now, at its Indiana plant, it is operating a 24-hour process known as "strip casting," in which steel is extruded through a nozzle into thin strips of metal, which are, for all practical purposes, market ready. Although, some of its takeover targets have been substantial mills, including Birmingham Steel and Trico in Alabama, it still carries the profile in the market of the nimble minimill innovator. It has also scored a point in its favor, with relative price gap between iron ore and scrap widening. Speaking at the Iron & Steel Technology Conference and Exposition being held this week, at the Charlotte Convention Center in Charlotte, North Carolina, Dan DiMicco CEO for Nucor stressed that consolidations, such as Mittal/ISG, must continue on a global basis for the industry to remain competitive.

International trade in steel grew 8% in 2004, to a record high of 262 million tons. This figure excluded internal trades within the EU and reflected a global 9% increase in production, to a record 1.05 billion tons. Japan was the leading exporter, with 34.8 million tons (mt). Following the Japanese was the EU15, with 31.8 million tons, Russia, with 30.4 million tons, Ukraine, with 28.2 million tons, and China, with 20 million tons. China entered the top five exporters for the first time and also led the importers, with 33.2 million tons, according the UK's Iron and Steel Statistics Bureau (ISSB). The USA imported 32.8 million tons, EU, 15 30.4 million tons, and South Korea, 17.7 million tons.

Steel production was up 23% in China for the first two months of 2005, which could see it reaching an annual figure of 330 million tons for the year, compared to the 2004 total of 272 million tons.

In 2004, U.S. steel imports rose by 51%, to 32.8 million tons. This is below the 1998 record figure of 38.5 million tons and the 2000 total of 35.2 million tons.

Supporting the steel production growth, global imports of iron ore grew by 12% in 2004. ISSB reports that imports reached a total of 650 million tons, compared to the 580 million tons total in 2004. China imported 208 million tons, the EU15, 145 million tons, and Japan, 135 million tons. Brazil led exports, with 237 million tons, followed by Australia, with 210 million tons.

Global scrap steel trade increased 15%, to 93 million tons. Trade in DRI grew to 8.5 million tons, and merchant iron to 17.1 million tons.

The ISSB compiled a global league table in millions of tons for steelmakers, based on 2003 crude steel production, adding in the subsequent Mittal Steel Ispat/LNM, and ISG mergers. Click on the image at right to view the top ten steelmakers list.

These figures give the world's top ten steelmakers 28% of total global production. In 1998, by contrast, the share for the top ten was 22%.

View Project Report - 04002211 04002927 04002446 10003410

Industrial Information Resources (IIR) is a Marketing Information Service company that has been in business for over 22 years. IIR is respected as a leader in providing comprehensive market information pertaining to the industrial processing, heavy manufacturing and energy related industries throughout the world.