Global steel production has crossed 1 billion tonne largely driven by a huge increase in demand from China as the country focuses on strong infrastructure led growth and prepares for Olympics 2008. China has become the largest producer and consumer of steel in the world during 2002 and is now followed by Japan and the USA in terms of production.

Steel is produced in the form of an alloy of iron containing carbon (2%), manganese (1%) and small amounts of silicon, phosphorus, sulphur and oxygen. It is the most important, multi-functional and most adaptable of materials in the world.

Sources and extraction

  • Hematite - Fe 2 O 3 - 70 percent iron
  • Magnetite - Fe 3 O 4 - 72 percent iron
  • Limonite - Fe 2 O 3 + H 2 O - 50 percent to 66 percent iron
  • Siderite - FeCO 3 - 48 percent iron

Usually, you find these minerals mixed into rocks containing silica

One tonne of pig iron requires 2 tonnes of ore, one tonne of coke and half a tonne of limestone.

Pig iron can be used for the following purposes:

  • Wrought iron is created by melting and mixing the pig iron with slag. Wrought iron is the stuff a blacksmith works with to create tools, horseshoes and so on.
  • Manufacturing of steel.

 World scenario

he industry went through one of its most difficult phases between 1997 and 2001, as it faced severe recession in the global economy leading to imbalance between capacity, demand and production. Breakup of USSR had turned the net exporters into net exporters and the world market had an excess capacity of 50 MT. Consequently, steel started getting traded at lower and lower prices. In addition, Asian economic crisis in 1997-98 had a further aggravated the imbalances in steel demand and supply. As a result, prices of steel during this period touched a 20-year low and many companies were forced to shutdown

To control the situation, advanced countries have called for a global agreement in 2001, organised by the OECD, to regulate the world steel production and stem the slide in steel prices. However, the global steel industry has witnessed a turnaround in 2002 led by the growth in China and prices of steel recovered to realistic levels once again.

Production trends in iron and steel

(thousand tonnes)
Pig iron Raw steel
  2004 2005e 2004 2005e
United States 42.3 33.1 99.7 92.4
Brazil 32.9 34 31.2 31.5
China 252 290 272 333
European Union 107 107 *193 186
India 30.8 31 32 34
Japan 83 83 112 113
Korea 28 28 47.5 49
Russia 53.1 48 64.3 64.2
Ukraine 31 30.3 38.7 42
Other countries 52 63 *158 146
World total 712 747 *1,050 1,090
Source: US geological survey

Latest trends

China continued to be the world’s largest Crude Steel producer in 2004 followed by Japan and USA. India occupies the 8 th position with 33.2 million metric tons in 2003 (Ministry of steel). USA remained the largest importer of semi-finished and finished steel products in 2002 followed by China and Germany.


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