For the last two years or so, steel business globally has been witnessing a boom after passing through prolonged recessionary trends.

Even a year ago the global steel market was highly fragmented. However, recent developments under the WTO regime are rewriting the rules of the game. In such a scenario, the global steel business is slowly opening up to be a “one market”.

Annual world steel production today has crossed the 1 billion tonne mark. Global steel consumption is projected to grow at 6 to 7 per cent in 2004. Steel consumption in China this year is expected to be registering a 13 per cent growth. Major economic blocs are all showing robust growth. Notably, the markets of the European Union are expanding with new countries joining the Union for free trade within the bloc.

The increased demand for steel has bolstered the sentiment, after a sustained period of depression. India’s steel consumption is also predicted to grow at a much higher pace in the years to come.

Another interesting feature of the steel business worldwide is the road towards consolidation. Today, the top ten producers in the world barely control about 25 per cent of the global steel production. The few top producers individually control less than 4 to 5 per cent of the total world steel production. Today, consolidation through mergers and acquisitions or various forms of business alliances is the name of the game. The top steel producers in the world are looking at increasing their individual market shares through such alliances.

This gives greater market accessibility, in terms of products, inputs and even technology, making steel production more efficient and economic. However, spiralling input costs and historic highs in oil prices in recent times are impacting business decisions across the world.

At the same time, the political scenario across the world is also witnessing a slow but steady change. With the major economic power blocs determining the dynamics of global politics, we perceive stability in global polity with individual economies focusing more on development and growth.

Technical innovations are also vital to all business. At a time when global steel markets are being driven by integration, process improvements are vital to long-term strategic planning.

In short, we are actually witnessing the globalisation of the steel business, with easier market-access across various regional trading blocs.


Pramod Mittal
Chairman & Managing Director, Ispat Industries Limited

Member of IISI | ISA | INSDAG