Market research: China Steel market

China steel market has been topping the list of steel production for many years, leaving far behind the other countries in terms of production volume. This is largely connected to high economic growth and manufacturing development of the country, which requires building material for massive construction. Thus steel production, manufacturing volume and living standards of China are gradually moving upward in the same direction.

China production of steel accounts for almost 50% of world steel

According to World Steel Association statistics, 220 million tonnes of steel was produced in China in 2003. By 2013, this number increased to 779, surpassing the second largest steel producer, the European Union, by more than 600 million tonnes. China’s steel production accounted for almost 50% of world total. The country’s leadership is evident and stable. According to market research, the industry has been growing 4.34% annually, reaching RMB 3.35 trillion of revenue in 2013.

Baosteel: China steel market leader with international vision

The industry comprises several producers although Baosteel is an apparent leader. The company exports its products to more than 40 countries, including Japan, Korea and the US. The company was founded in 1978 under government ownership. It is the second-largest producer of steel in the world and first in China. In 2012, Baosteel contributed 4% to total country’s output.

Hebei Iron and Steel is expected to catch up with Baosteel in the foreseeable future

Apart from it, Wuhan Iron and Steel, Hebei Iron and Steel, and Shanxi Taigang Stainless Steel are also highlighted by Market research as outstanding companies in their industry. Wuhan Iron and Steel used to be a leader in the China steel Market; however, it currently produces 10 million tons annually, which is three times less than Baosteel. Hebei Iron and Steel is comparatively a young company, which was established in 2008. Nevertheless, it is the third world largest steel producer, which rapidly catching up with an industry leader, Baosteel, in terms of production level. Shanxi Taigang Stainless Steel is the earliest company in the market of all four others mentioned; it was included in Forbes Global 2000.

China steel market’s demand need to import due to lack of high-quality steel production in China

It is crucial to keep in mind that the industry is currently experiencing some difficulties concerning productivity, efficiency and quality. After 2013 fiscal year, 3.3% revenue increase was reported. However, net profit margin, remaining low at 48%, primarily indicates overcapacity of enterprises. Moreover, quality of steel, produced in China, does not usually respond international standards. Building construction, which is currently booming in the country, requires high-quality steel, which China has a lack of. In particular, Baosteel is supposed to be one of the most reliable producers in terms of steel quality. As a result, being the largest steel exporter, China remains one of the major steel importers.

As it was mentioned before, China has huge capacity of steel production, which makes it the largest producer and exporter of steel for many years. Four largest state-owned companies, including Baosteel, accounts for around 10% of market share. The rest is divided into medium and small-size enterprises. The industry is supposed to be largest in the world although it has been experiencing some difficulties with quality and production inefficiency for the last few years.

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