Economics

All about the Steel Industry

The second largest industry in the world today, steel production and its related industries accounts for over one million jobs in the United States alone.

5. Description

Steel is a widely used construction material across the world, and is itself actually an alloy of iron and carbon. It also has manganese, silicon, oxygen, phosphorus, and sulphur in smaller amounts. The steel industry is the second largest one globally after the oil and gas industry, with an approximate turnover of $900 billion USD. In the US alone, the steel industry directly provides employment to an approximate 150,000 people, and indirectly supports the creation of more than one million jobs. There are different types or grades of steel which are used for different purposes, such as manufacturing cars, home appliances, cargo ships, surgical instruments, construction products, and many more. The metal has also found in important applications in the aerospace and mining industries.

4. Location

Although a large number of countries are engaged in steel production, the industry is largely concentrated in a handful of countries which combine to produce nearly 75% of the world's steel. These countries are the United States, China, India, Russia, Japan and South Korea. Of these, China was the largest exporter of steel in 2015, with over 100 million tons of steel exports in the year. Others exporting large quantities of steel were the European Union, Japan, the United States, India, South Korea, and Russia. The US, Germany, South Korea, and Italy are some of the top importers of steel. Some countries import steel on a large scale despite being excellent in steel production themselves because of their high domestic demands, especially for those producing large arsenals of weapons for defense purposes.

3. Process

The process of steel production mainly involves either one of two main processes. These are either the Basic Oxygen Furnace (BOF) or the Electric Arc Furnace (EAF). In the BOF steel production process, steel is produced from raw materials like iron ore, coke, and limestone, in addition to a small amount of old steel (scrap). Meanwhile, in the EAF process, 100% old steel is used to produce new steel. In the EAF process, there are many steps for steel production, including furnace charging, melting, refining, de-slagging, tapping, and, finally, furnace turn-arounds. The steel thus produced is then cast into various shapes as per the requirement of its consumers.

2. History

It was not until the 17th Century that people start looking for a versatile structural material that could meet the demands for the increasing levels of urbanization being seen. In the 19th Century an Englishman named Henry Bessemer discovered an effective and inexpensive method of producing steel from molten pig iron. This led to the development of the steel industry as we would now recognize it all over the world. However, it was not that steel was unknown to the ancient and medieval worlds. Blacksmiths were aware of the process of steel making, which they used mainly for cutting edges of knives, swords, and daggers, as it was too expensive and intensive to make anything much larger.

1. Regulations

Steel, as a material, does not pose any health problems for human beings or to the animal and plant kingdoms. The furnaces used in steel production processes, however, often times incorporate large amounts of fossil fuels, thusly greatly contributing to carbon emissions and, subsequently, global warming and climate change. The steel industry is experiencing a tough time at present with an exponential rise in exports of steel by China. This has along with some other external factors decreased the steel production cost and has forced many companies engaged in steel production to shut down their low-profit production units leading to a massive reduction in jobs in the steel industry. The surplus in production and low domestic demand has worsened the situation.

More in Economics