Exclusive extracts from this 68-page-long report:
- Who are the key players?
Leading steel producing companies are mostly vertically integrated pure players. ArcelorMittal remains by far the world's largest steel maker, both in terms of output and revenue. The 2016 merger of Baoshan Iron & Steel and Wuhan Iron & Steel, supported by the Chinese government's objective to consolidate its domestic market, has led to the creation of the world's second largest steel producer, China Baowu. More generally, public support measures (subsidies, easy access to cheap credit) and strong domestic demand have propelled Chinese players among global market leaders since the 2000s. [...]
Groups analysed in this report include: ArcelorMittal, Baoshan Iron & Steel (Baosteel), Nippon Steel and Sumitomo Metal Corporation (NSSMC), POSCO, Tata Steel, Nucor Corporation, Gerdau, Steel Authority of India (SAIL), U.S. Steel Corporation and EVRAZ.
- What are the players' strategies?
Asset portfolio optimisation remains among steelmakers' key strategies to reduce costs and enhance margins. The world's largest steel producer ArcelorMittal has been particularly active in this regard, with strategic divestitures such as the sale of its wholly-owned Spanish subsidiary ArcelorMittal Zaragoza for €80m. Steel companies have also been seeking to strengthen their ties with automotive companies, which are among their largest customers. South Korea's POSCO for instance set up a new plant in Thailand entirely dedicated to serving car manufacturers, while China's Baosteel has installed intelligent supply chain platforms at Chinese carmakers Great Wall Automobile and Dongfeng Nissan. […]
- What are the players' key growth and profitability drivers?
Subdued global demand and structural overcapacity have been weighing on steel makers' revenues and profitability in recent years. During 2013-2017, ArcelorMittal's revenue remained virtually flat (+0.4% CAGR), while Tata Steel and U.S. Steel Corp.'s sales decreased at an average yearly rate of 3% and 8%, respectively. On the other hand, some players recorded strong profitability thanks to their specialisation in high value-added segments. Russia's EVRAZ, which focuses on the manufacture of railway steel products, for example enjoyed an average margin of roughly 12% during 2013-2017. [...]