Market structure of steel raw material

Comprehensive view of the market structure of 12 steel raw material

– Supply: largest suppliers and reserves/resources

– Consumption and trade flows for each raw material

–Price movements and stocks of each raw material

–export restrictions and environmental/health issues related to the production of each raw 

List of steelmaking raw materials examined in the paper

•Main steelmaking raw materials 

–Iron ore and coking coal are the two main inputs in the integrated steelmaking process

–Scrap is used mainly in EAF but also in BOF

•Other metals used in smaller amounts 

–In all or most steels : manganese, silicon

–In some steels :nickel, chromium, zinc and tin

–Minor alloying elements : molybdenum, vanadium and tungsten

Properties of minor metals in steel

• Manganese: Desulpherising (sulphur causes steel to crack) and as alloying element for strength and toughness

• Silicon: Used to de-oxidise steel

• Nickel: Anti-corrosion (nickel content in high quality stainless steel 8-10% )

• Chromium: Resistance to corrosion, temperature and wear (used in stainless steel (average content 18%)

• Zinc: Used to galvanise steel (enhances corrosion resistance)

• Tin: Brings protective coating to steel (used in food and drink cans)

• Molybdenum: Resistance to heat, corrosion(high-end steel). Brings weldability to steel (construction steel)

• Vanadium: Brings extreme hardness to steel (high-strength steel)

• Tungsten: Brings extreme hardness to steel (high-speed steel)

Steel industry share of the use of these metals, in %

• Manganese: 90%. Used also in batteries.

• Silicon: 60%.Used also in construction materials and production of glass.

• Chromium: 75%. Used also in aerospace superalloys, iron castings, refractory products, paints, cosmetics and welding rods.

• Nickel: 60%. Used also in aerospace superalloys and batteries.

• Zinc: 60%.Used also in die-casting and in the production of brass and bronze.

• Tin: 20%.Used also in solder.

• Molybdenum: 60%.Used also in aircraft engine parts, chemicals and alloys for making tools.

• Vanadium: 85%.Used also in longer-range electric car batteries.

• Tungsten: 20%.Used also for making abrasives, knives and armaments, and in fluorescent lighting.

Iron ore

• Share of steel industry in demand : 98%

Production : 1.6 bn tonnes, 1. Australia (25%), 2. Brazil (19%), 3. India (16%)

Reserves : 48 years of output, 1. Russia

Exports : 954mmt : 1. Australia (38%), 2. Brazil (28%), 3. India (12%)

• Imports: 937 mmt : 1. China (67%), 2. Brazil (11%), 3. Europe (10%)

Coking coal

• Share of steel industry in demand : 100%

• Production : 794mmt, 1. China (52%), 2. Australia (16%), 3. Russia (7%)

• Reserves : 1. US, 2. China, 3. Russia

• Exports : 232mmt : 1. Australia (54%), 2. US (15%), 3. Indonesia (13%)

• Imports: 199 mmt : 1. China (26%), 2. China (18%), 3. India (12%)

Ferrous Scrap

• Share of steel industry in demand : 100%

• Generation : 424mmt, 1. China (17%), 2. US (16%), 3. Japan (9%)

• Exports : 92mmt : 1. US (24%), 2. Japan (11%), 3. Germany (8%)

• Imports : 91.2 mmt : 1. Turkey (17%), 2. China (15%), 3. South Korea (8%)

Manganese

• Share of steel industry in demand : 90%

• Production : 14 mmt, 1. South Africa (25%), 2. Australia (19%), 3. China (16%)

• Reserves : 44 years of output, 1. Ukraine

• Exports : 8mmt : 1. South Africa (37%), 2. Australia (29%), 3. Gabon (15%)

• Imports : 7mmt : 1. China (67%), 2. Ukraine (7%), 3. Norway (7%)

Silicon ferro-alloys

• Share of steel industry in demand : 60%

• Production : 8mmt, 1. China (64%), 2. Brazil (6%), 3. Russia (6%)

• Reserves : Ample

• Exports : 2.5mmt : 1. China (48%), 2. Norway (16%), 3. Russia (12%)

• Imports : 2.1mmt : 1. Japan (33%), 2. Germany (24%), 3. US (14%)

Chromium 

• Share of steel industry in demand : 75%

• Production : 26 mmt, 1. South Africa (39%), 2. Kazakhstan (17%), 3. India (14%)

• Reserves : 13 yrs of output, 1. Kazakhstan

• Exports : 9mmt : 1. South Africa (57%) 2. Turkey (19%), 3. Kazakhstan (15%)

• Imports : 8mmt : 1. China (85%), 2. Russia (10%), 3. Turkey (1%)

Nickel 

• Share of steel industry in demand : 60%

• Production : 1.5 mmt, 1. Russia (25%), 2. Indonesia (13%), 3. Philippines (13%)

• Reserves : 50 years of output, 1. Australia

• Exports : 20mmt : 1. Indonesia (53%), 2. Philippines (44%), 3. Australia (2%)

• Imports : 22mmt : 1. China (74%), 2. Japan (16%), 3. South Korea (5%)

Zinc

• Share of steel industry in demand : 60%

• Production : 12 mmt, 1. China (27%), 2. Australia (12%), 3. Peru (11%)

• Reserves : 20 years of output, 1. Australia

• Exports : 8mmt : 1. Peru (32%), 2. Australia (28%), 3. Bolivia (11%)

• Imports: 8mmt : 1. China (50%), 2. South Korea (17%), 3. Spain (12%)

Tin

• Share of steel industry in demand : 20%

• Production : 284 mmt, 1. China (34%), 2. Indonesia (32%), 3. Peru (12%)

• Reserves : 18 years of output, 1. China

• Exports : 30mmt : 1. Australia (40%), 2. Rwanda (17%), 3. Bolivia (17%)

• Imports : 54mmt : 1. Malaysia (43%), 2. Thailand (33%), 3. China (19%)

Molybdenum

• Share of steel industry in demand : 60%

• Production : 220 mmt, 1. China (40%), 2. US (24%), 3. Chile (17%)

• Reserves : 45 years of output, 1. China

• Exports : 175mmt : 1. Chile (41%), 2. US (17%), 3. Peru (13%)

• Imports : 159mmt : 1. China (39%), 2. Belgium (23%), 3. Chile (19%)

Vanadium

• Share of steel industry in demand : 85%

• Production : 64 mmt, 1. China (47%), 2. South Africa (22%), 3. Russia (11%)

• Reserves : 212 years of output, 1. China

• Exportation : 10mmt : 1. China (40%), 2. Russia (30%), 3. South Africa (20%)

• Importation : 8mmt : 1. Czech Republic (38%), 2. Korea (25%), 3. Japan (25%)

Tungsten

• Share of steel industry in demand : 20%

• Production : 61 mmt, 1. China (85%), 2. Russia (5%), 3. Canada (3%)

• Reserves : 47 years of output, 1. China

Market structure of 12 steel raw material

Market structure of 12 steel raw material

Implications

• The potential for supply shocks is very large -> the costs of making steel might remain volatile
• Export restrictions on raw materials are widespread – hurting the competitiveness of steelmakers who rely on imports
• Ensuring secure and accessible supply of raw materials remains of major importance for the steel industry

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