In the competitive landscape, the report analyses the degree of competition among the industry players as well as industry growth and market scenario. The global steel market is at a growing stage, which represents moderate stats in terms of market value and overall volume. Over the past few years, steel market has witnessed healthy demand from industries like automotive, building & construction, electrical appliances, transportation, and others. Nevertheless, the degree of competition among the market players is still less on account of limited market players across the globe. Globally market for steel is fragmented and it is moving towards growth expansion by specifically adopting partnership, expansion, joint-venture strategies, and product launch strategies.
In the global steel market, ArcelorMittal, POSCO, Shangang Group, NSSMC Group, China Baowu Group, HBIS, Tata Steel Group, Nucor Corporation, Hyundai Steel Company, China Steel Corporation, Maanshan Steel, thyssenkrup, JFE Steel Corporation, JSW Steel Limited, and Jianlong Groupare the major shareholders. As mentioned earlier, the market is moving towards growth expansion and these industry players are adopting expansion, joint-venture, and product launch strategies to penetrate in the global market.
Key Developments & Strategies
TABLE Key Developments:- Ongoing and Upcoming projects
Month/Year
Investment
Description
September 2017
USD 400 Million
Kobe Steel Ltd. and United States Steel Corporation planned to start up a new continuous galvanizing line (CGL) at its subsidiary, PRO TEC Coating Company. The company will spend around USD 400 million to build CGL, which has an annual capacity of 500,000 tons per annum. Construction is predicted to begin in the fourth quarter of 2017 and the line is estimated to commence start up in 2019.
March 2017
USD 395.12 Million
Voestalpine AG planned to invest USD 395.12 million to build special high performance steel plant in Kapfenberg, which will replace the existing Bohler special steel plant in Kapfenberg. This plant will have a production capacity of around 205,000 tons high performance steel per annum.
August 2017
USD 47.98 Million
NLMK Group planned to construct a new steelmaking briquettes at its Lipestk production site. Company will invest around USD 47.98 Million with annual production capacity of 700,000 tonnes per year. Moreover, completion of the project is planned for late 2018.
August 2017
USD 108.37 Million
ArcelorMittal planned to invest USD 108.37 Million at its Dunkerque and Florange sites in France out of which EUR 67 Million to spend in construction of new production line for automotive steels at its Florange site, whereas EUR 29 Million to spend at its Dunkerque site to deliver technical improvements that will provide higher flexibility for high value added products. This project is expected to begin by mid2019
July 2017
USD 75 Million
Steel Dynamics, Inc. planned to invest around USD 75 Million to expand its Structural and Rail Division located in Columbia City, Indiana. This project enhance the annual production of 240,000 tons of reinforcing bar. This project is scheduled to completed during the fourth quarter of 2018
May 2017
USD 176 Million
Nucor Corporation announced to invest around USD 176 Million to construct a hot band galvanizing and pickling line at its sheet mill in Kentucky. This product line will have an annual capacity of 500,000 tons. The new coating line is predicted to come under operation in the first half of 2019
January 2017
USD 150 Million
Charter Steel planned to invest USD 150 Million to build a new Special Bar Quality bar mill at its Cuyahoga heights, Ohio. The project is expected to complete by the second half of 2018
April 2017
USD 85 Million
Nucor Corporation planned to invest USD 85 Million to upgrade its rolling mill at its steel bar mill in Marion, Ohio. The modernization project will enhance the productivity of steel mill.
February 2017
USD 28 Million
Steel Dynamics planned to invest USD 28 Million to expand its Roanoke Bar Division, Virginia. With this investment, the company increase its production capacity to over 600,000 tons per year. Commissioning is predicted to commence at the end of 2017.
September 2016
USD 230 million
Nucor Corporation planned to add an additional cold mill at its Nucor Steel Arkansas division. The mill will cost an estimated USD 230 million to build and is expected to be operational in approximately two years.
June 2016
USD 270 Million
Nucor corporation and JFE Steel Corporation established a joint venture to build a plant in Central Mexico. The plant is of Galvanized Sheet Steel and will cost around USD 270 Million and has a capacity of 400,000 tons per year. Operation is predicted to begin in the second half of 2019.
March 2016
USD 1600 Million
POSCO signed memorandum of agreement (MOA) with PKP, and Iranian steelmaker to build USD 1600 Million Integrated steel mill. The plant is predicted to come under operation by the end of 2019.
July 2015
USD 187.93 Million
Essar Steel Algoma planned to invest USD 187.93 Million for its modernization and expansion program which include construction of ladle metallurgy furnace and expansion of direct strip production complex. The whole optimization and renewal program will be completed by 2022.
October 2015
USD 42.84 Million
Severstal, a leading integrated steel and steel related mining company invested around USD 42.84 Million in the manufacturing of flat steel production at Cherepovets Steel Mill, Russia. With this production capacity is expected to increase by 200 thousand tonnes per year.
January 2015
USD 390 Million
PT Krakatau Steel (KRAS) planned to build hot rolled coil manufacturing unit with an investment of around USD 390 Million in the Cilegon industrial estate, Banten. The factory is predicted to be completed by the end of 2017.
Investment Outlook
Year 2015 witnessed decreasing investment due to oversupply of steel which lead to decreasing steel prices. Closure of high capacity steel plants observed in China. Although, China steel market is still struggling with the investment and projected to close 20% of its overall steel production capacity, global market excluding China is exhibiting positive upturn in the steel investments. Developing countries such as India are showing encouraging environment around steel investments. Earlier foreseen threats in the global economy which included for the geopolitical trends in some economies have declined. Consequently, global steel market is developing and following its cyclical progress.
Steel demand in developed economies is improving owing to the increasing investments in infrastructure and thus driving investments to some extent. Steel markets in Japan, and South Korea has improved with growing international steel exports.
Government of China has been active in closure of the inefficient steel plants. This has led to decrease the supply demand gap and has positively affected the global steel prices. In the current year, the investment has continued to decrease. Although, Chinese steel demand is growing at highest growth rates, Chinese investments are not expected to restructure in the immediate future.
Developing countries such as India are showing positive investment outlooks on the background of positive government reforms. Growing investments in private residential buildings and automotive manufacturing is showing encouragement for the foreign investments in steel industry. India domestic demand and exports has been showing optimistic scenario even in the global economic downturn. This has helped the country to retain faith of investors in the Indian steel market.
Middle East & Africa region is suffering from economic downturn due to the oil prices fall. The economic scenarios is anticipated to gain restructure by 2020. Lower economic performances of the countries in Gulf Council are facing challenges due to low oil prices. The investments are anticipated to gain traction after the increase of oil prices
Construction Spending
FIGURE Global Construction Spending (USD Million), 2012-2017
Application wise, building and infrastructure investments influence the global steel market with greater impact. This is attributed to the fact that infrastructure and building accounts for more than half of total steel consumption. Fortunately, building & infrastructure investments are positive for the current year.
Key Developments of Market Players
TABLE Key Developments
Month/Year
Approach
Description
February 2017
Agreement
ArcellorMittal and Votorantim S.A. signed an agreement in which Votorantim will become a subsidiary of ArcelorMittal Brazil. With this combination the business will be in long product steel producer with annual crude capacity of 5.6 million tonnes and annual rolling capacity of 5.4 million tonnes.
July 2017
Agreement
ArcelorMittal signed an agreement with Megasa Siderurgica S.L. for the sale of its subsidiary ArcelorMittal Zaragoza in Spain.
October 2017
Agreement
POSCO signed an agreement with Top Tubes, a UK based organization. Under this agreement the company will manufacture pipe with Top Tubes. With this agreement the company to accelerate and expand their presence to the European market by strong relationship with top tubes.
May 2017
Expansion
POSCO constructed the Steel Forming Laboratory at the POSCO Global R&D centre in Songdo to raise the standard of solution marketing. POSCO planned to strengthen its collaborative system by involving joint research with not only large OEM companies but also small and medium sized parts companies.
November 2016
Expansion
OSCO DAEWOO acquired POSCO P&S's business segment such as steel in order to becoming one of the leading steel trading companies across the globe.
September 2017
Expansion
Jiangsu Shagang will acquire 45% stake in Dongbei Special Steel Group. With this acquisition, the company will strengthen its position in global steel manufacturer
December 2017
Acquisition
NSSMC Group announced to acquire additional shares of common stock of Katakura Steel Tube Co. Ltd and will make it’s a subsidiary. With this acquisition, the Katakura Steel Tube, as a subsidiary of NSSMC, will be better positioned to manufacture and offer high-grade products which satisfy the customer's requirements
October 2016
Expansion
NSSMC Group announced to expand business cooperation with Vallourec S.A. a prominent strategic partner in the pipe and tube business. The company planned to improve profitability by taking measures such as to rationalize upstream production capacity and streamline the administrative function.
March 2016
Expansion
NSSMC Group expanded the product list of a wire rods with a diameter of 5.0 mm or less by increasing mass production using NSSMC's unique technology
March 2016
Merger
NSSMC Group announced to merge its two subsidiaries into merged into Siam United steel companies (SUS) located in Thailand. With this acquisition the company increase its presence in Thailand.
September 2017
Expansion
China Baowu Group is planning to increase its total annual output capacity from the current 60 million tonnes to 100 million tonnes. With this expansion, Baowu is planning to raise its market share to 20 to 25 per cent.
May 2017
Joint Venture
Baosteel Co., Ltd and BYD jointly set up the laboratory for automotive sheet. With this joint laboratory the cooperation between Baosteel and BYD will strengthen.
August 2013
Acquisition
HBIS Group acquired Palabora Mining Company Limited (PMC), a South African mining company. With this acquisition, the HBIS accumulate international operation and management experience that will foster international management talents.
November 2017
Joint Venture
A joint venture between HBIS Tangshan Iron and Steel Group along with Primetals Technologies started operation. Primetals Tangshan Technology Services limited (PTTS) aim is to offer comprehensive technology based services in off line maintenance, equipment refurbishment, condition monitoring and operational support for the slab casters of Tangsteel and other customers.
January 2017
Agreement
Tata Steel Group establish an agreement to acquire 51% equity stake in Creative Port Development Private Limited for the development of Subarnarekha Port at Odisha. With this acquisition, the company improve its competitive position of Indian operation and reduce the risk for in-bound and out-bound supply chain.
November 2016
Agreement
TSUK an indirect subsidiary of the Tata Steel Group made an agreement with Liberty House Group to sale of specialty steel business. This agreement is a part of company's restructuring strategy of the UK portfolio.
January 2017
Acquisition
Nucor Corporation acquired Southland Tube, a manufacturer of approximately 240,000 tons of HSS steel tubing per year. With this acquisition, the company strengthen its position in HSS steel tubing market across the globe
August 2015
Expansion
Hyundai Steel Company completed the construction for Dangjin Special Steel Plant. This plant has an annual capacity of manufacturing one million tons of special steels including bars and rods. This expansion led the company to meet the growing need of products
January 2016
Product Launch
Hyundai Steel developed a high-performance earthquake resistant reinforced bar SD400S, SD500S, and SD600S. Production of this product has started. With this product launch, company expanded its product portfolio.
May 2017
Expansion
JSW Steel planned to double steelmaking capacity at Dolvi in Maharashtra to 10 million tonnes per annum. Along with this the company will also modernize and enhance capacity of Vasind and Tarapur downstream facilities.With this expansion, the company will able to meet the growing demand of steel in domestic market
August 2014
Acquisition
China Steel Corporation (CSC), a Taiwan based organisation will buy Sumitomo Corp's 5% stake in their existing joint venture China Steel Sumikin Vietnam Joint Stock Co (CSVC). With this acquisition, CSC will hold 56% stake in CSVC and strengthen its position in CSVC joint venture company.
October 2017
Joint Venture
JFE Steel Corporation and other organisation such as Meranti, JFE Shoji, MISI, and Hanwa combinedly establish a joint venture to produce and sell hot-dip galvanized and colored flat steel products for the building and construction sector in Myanmar.
June 2017
Joint Venture
JFE Steel Corporation and Nucor Corporation establish a joint venture named as NUCOR-JFE STEEL MEXICO (NJSM) to produce and sell steel sheets for automobiles. The plant starts operation in 2019.
December 2017
Product Launch
JSW Steel launched JSW Everglow, a premium and technologically advanced steel product in the Kerala market. With this product launch the company expand its portfolio and is focusing on roofing and wall category
July 2017
Expansion
JSW Steel planned to build slurry pipeline to transport iron ore and coal from its vijaynagar plant in Karnataka to the coast. This transportation of iron ore through slurry pipeline will contribute to alternate source of iron ore from outside Karnataka at competitive price
March 2017
Acquisition
JFE Steel Corporation and Marubeni-Itochu Steel Inc. (MISI) announced to acquire stakes in PT. Steel Pipe Industry Indonesia, Tbk (SPINDO), and Indonesian company. With this acquisition, the company is expected to gain a stable channel in the growing market to develop sales of JFE Steel-branded products.
February 2017
Joint Venture
JFE Steel Corporation announced to establish a joint venture with AGRIMECO in Vietnam to sell their processed construction materials. With this joint venture, company leverage AGRIMECO strong local presence and JFE Steel's capabilities in technological development
January 2017
Expansion
thyssenkrupp modernized pickling line for hot rolled steel at its Duisburg Huttenheim site to improve the product quality and to extend the life of the facility. With this improvement, company will able to meet the risen quality standard for steel
September 2016
Acquisition
Baoshan Iron & Steel Co. Ltd acquired Wuhan Iron and Steel Company limited. This deal has a value of USD 8719 Million
February 2017
Acquisition
Ternium SA acquired complete ownersip interest in thyssenkrupp Slab International B.V and subsidiary CSA from thyssenkrupp AG. The Deal size is of worth USD 1648 Million
December 2016
Agreement
Xinjiang Ba Yi Iron & Steel signed an agreement to sell its unit for USD 451.5 Million
December 2016
Acquisition
Nucor Corporation acquired Republic Conduit, a leading manufacturer of steel electrical conduit from Tenaris S.A. for USD 335 Million. With this acquisition the company will attain long term profitable growth
July 2016
Acquisition
CE Star Holdings acquired all assets and business of Jorgensen Forge Corp., commercial metal forming and zero manufacturing from the chapter 11 estates of constellation enterprises and its subsidiaries. The Deal has worth USD 108 Million
June 2016
Acquisition
Steel Dynamics, Inc. acquired 100% stake of Vulcan Threaded Products Inc. The deal size is worth USD 84 million. With this acquisition the company expand its product portfolio.
April 2016
Acquisition
thyssenkrupp acquired the ownership of Brazilian steel mill thyssenkrupp CSA and purchased all the shares currently held by Vale S.A.
