IRON AND STEEL INDUSTRY

The Iron Age began at around 1500 BC.  Iron started at a very moderate rate with many products. Slowly the importance was realised and it became a very necessary product. Whole empires and civilization were forged by iron tools. Not to forget iron weapons.

Then in the 20^th century the industrial revolution began which couldn’t have happened if there were no iron and steel which is a product made from iron. Railways, ships and factories would not exist without iron and steel.

However, in the last two decades there was another great revolution but nobody noticed it because everybody was so busy trying to keep up with it. It was the Information Age which means plastics and electronics. The two materials gave great pressure to the iron and steel industries.

 A Global Industry

                   

In spite of these new materials which are cheaper, especially plastics, the demand for iron and steel still continued. Australia and Brazil are producing millions of tonnes of iron ore. It is then shipped to any country around the world. The steel-making plants will then produce the necessary product.  Large steel-making plants emerged all over the world because after the World War 2 the shipping costs were very low. Before the war steel mills were situated near the raw material such as iron ore, coking coal and limestone.

In order to produce steel the plant has to reduce the carbon content in the iron to at specific level. Anything between 0.05 per cent and 1.5 per cent, it depends on the type of steel. The steel is usual produced into bars, slabs, wire, sheets or rods. It will then be shipped by rail, road or sea. Most of the manufacturers have a demand of steel.               

However, the biggest demand comes from shipbuilding, machinery, construction and vehicle manufacturing.

The energy crisis at the beginning of the ‘70s brought the steel industry into great difficulties till such time the demand and profit used to rise steadily. With the crisis the demand fell and so did the profit.  The owners had to face the fact, in order to stay compatible, they have to invest huge amounts of money to modernise the plants. This created a backlash in so far that workers had to be laid off and this again reduced the spending power which reflected in the economy.

During the recession in 1989-92 the steel industries had to re-construct it again. This was done two ways. Either vertical integration which means the steel industries buys out all the distribution companies which market the steel. This would bring the profit of the distributors to the manufacturer.

The second way of re-construction was to specialise of a particular product instead of a wide variety. During this process the British Steel became a world wide name for structural steels used in the building trade.

Mannesmann in Germany specialised in tube making and Sacilor of France produced stainless steel.

These changes resulted into the US and European steel industries to be most competitive.

New Competition

To start off a steel industry the cost are huge amount of money, skilled labour, sophisticated management, good infrastructure and communication. It was difficult for any country to take on such an enormous new undertaking. However, since the World War 2 few countries started and succeeded. There were Japan which is now one of the top steel producers, South Korea rose to the 6^th place and Taiwan was on the 17^th.They also expanded to neighbouring countries like the Philippines and Malaysia.

Turkey, China and India followed in their footsteps and achieved higher productions then South America. Brazil has a great advantage because it produces its own iron ore.

The least competition came from Eastern Europe and the former USSR. After the collapse and with that state support, they used the old open-hearth process instead of the basic oxygen or electric-arc furnaces like the West. Eastern Europe continued to use the traditional casting of raw steel into ingots. The West used a more efficient casting process. 

In 1995 countries like the Czech Republic, Poland and Hungary started to improve their production and their profit increased. In Russia and the Ukraine the production is falling but slowly.

A small Revolution

It started when quite a number of mini steel mills were built which altogether had an impact.

A mini mill is an electric-arc furnace mill. They usual make steel from scrap. Mini mill have a turn out of half a million tone a year. Mini mills encouraged the scrap metal dealer to sell to the steel industry.  It is estimated around 10 million tonnes of scrap are collected in Britain every year. France, Germany and The Netherlands are major contributors of scrap metal in Europe. They export a great amount to countries like Spain, Turkey, India and the Far East.

The other type of mill is called an integrated mill. It produces steel by using a basic oxygen process and iron ore, coke and limestone. Integrated mills will produce 10 to 20 tonnes a year.

Another Option

The other alternative to steel is new materials such composites, plastics and glass fibre. They are cheaper and sometimes even better quality.

1990 General Motors’ started to use mainly plastic and fitted thermoplastic body panels to the steel frame. 

The Shell Oil manufactured a North Sea oil rig from plastic.

In order to counteract these new developments the steel industry produced coated steel which prevents rust. The coat is made of zinc and plastic. This new material is used in car manufacturing and architectures.