Project Paper (Arcelormittal)

Introduction of Steel Industry

Steel, the recycled material is one of the top products in the manufacturing sector of the world. It is a booming industry with huge demand, mainly generated by the development projects that were formulated throughout the world, especially infrastructural works and real estate projects in developing countries. The industry has grown tremendously in the last one and a half decade with strong financial results as the increasing need of steel by developing countries for their infrastructural projects has pushed the companies in this industry to their maximum operative capacity.

The industry was till recently dominated by the United States of America but the scenario has changed with a rapid pace with Indian steel companies on acquisition sprees. The industry is becoming more and more competitive with every passing day. During the period 1960s to late 1980s, the steel market used to be dominated by the OECD (Organization for Economic Cooperation and Development) countries. But with the fast emergence of developing countries like China, India and South Korea in this sector has led to slipping market share of OECD countries. The balance of trade line is also tilting towards these countries.

Industry Analysis

1) Industry Facts

The global steel industry has been growing at a fluctuating rate in recent years. The growth rate is expected to stabilize and gradually increase through 2013. The global steel market generated total revenues of $685.6 billion in 2008, representing a compound annual growth rate (CAGR) of 13.2% for the period spanning 2004-2008. In comparison, the Americas and European markets grew with CAGRs of 15.2% and 9.3%, respectively, over the same period, to reach respective revenues of $125.1 billion and $177.6 billion in 2008.

Market consumption volumes increased with a CAGR of 5.8% through 2004-2008, to reach a total of 1,205.1 million metric tons in 2008. The market's volume is expected to rise to 1,847.3 million...