Introduction to Steel Commodities - dummies

Introduction to Steel Commodities

By Amine Bouchentouf

The development of steel and its use as an economic commodity, alongside iron, changed the course of human history. In fact, the last stage of prehistoric times, the Iron Age, is named thus because humans mastered the iron- and steel-making processes. This development allowed societies to build tools and weapons, which speeded advancements in construction and technology. Steel was responsible for another revolution in the 19th century: the Industrial Revolution.

Today, in a high-tech world dominated by software and technological gadgets, this age-old metal is still as reliable as ever. In fact, steel is resurging as advanced developing countries — China, India, and Brazil — barrel down a path toward rapid industrialization like the one the West experienced in the 19th century. Steel, which is iron alloyed with other compounds (usually carbon), is still the most widely produced metal in the world.

Steel is measured in metric tons, sometimes abbreviated as MT. For global production and consumption figures, million metric tons (MMT) is used.

China dominates steel production, with generous subsidies in place for its steel manufacturers. China now produces three times more steel than Japan, the second-largest producer.

For a long time, the United States was the number one producer of steel, but its dominance eroded largely because of competition from Asia (especially China and Japan) and partly for internal reasons (such as the high costs of running a steel mill in the United States). The United States is still an important player in the steel industry; other countries worth mentioning include Russia, Germany, and South Korea.

Here are the top steel producers in the world in 2009. To put things in perspective, total global steel production in 2009 stood at 1,220 MMT.

Country Production (Million Metric Tons)
China 567 MMT
Japan 88 MMT
United States 60 MMT
Russia 59 MMT
India 56 MMT
South Korea 48 MMT
Germany 32 MMT
Ukraine 29 MMT
Brazil 27 MMT

Source: International Iron and Steel Institute

If you’re interested in exploring additional statistical information relating to steel production and manufacturing, check out the following resources: