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China’s Booming Steel Market Plugs Onward

ArcelorMittal (AMS:MT), Nippon Steel Corporation (TYO:5401) and Baosteel group corporation are all giant companies that manufacture and distribute steel across the globe. China has become the largest producer and consumer of steel in the world. In 2008, China produced over 500 million tonnes of steel. ArcelorMittal is a Luxembourg-based steel manufacturing corporation, who has become the largest single producer of steel in the world.

Nippon Steel Corporation is based in Tokyo, Japan. Yawata Steel and Fuji Steel merged in 1970 to form the Nippon Steel Corporation. Mr. Akio Mimura is the Representative Director and Chairman of Nippon Steel. The company managed to produce 37.5 million tonnes of steel in 2008. In 2006, Nippon Steel got together with Mitsubishi Heavy Industries, Ltd. To create a high tensile strength steel. The original application of this new steel was to create a less thick steel that would be just as strong in order to cut back on fuel usage. The company produced $36.44 billion in revenue in 2007.

ArcelorMittal is a combination of steel companies that have merged over time. Mittal Steel was founded in 1989. It has aquired many different steel companies around the world, including Arcelor in 2006, who was the second largest steel producer in the world in 2005. Mr. Lakshmi N. Mittal is the Chairman of the Board of Directors and CEO of ArcelorMittal. ArcelorMittal has produced over 103 million tonnes of steel in 2008. With Mr. Mittal overseeing the largest producer of steel in the world, Superman may no longer
be entitled to the name “the man of steel” . ArcelorMittal brought in revenues at $65.11 billion in 2009.

Baosteel is a Chinese based company that started construction in Shanghai in 1978, and is now the third largest steel producer in the world. The company employs over 108,000 employees and has been ranked 220th on the Global 500. The company is as environmentally conscious as a steel producer can be. The company became the first enterprise to gain the title of “National environment-friendly enterprise” in the Chinese metallurgical sector and Shanghai Municipality. The company is continually acquiring new assets and building an empire to meet the needs of new demand. Baosteel pulled in $21.7 billion in 2009.

The market is definitely set to meet the demands of the new Chinese business dynamic. Steel companies in China are pushing the classic front runners of the industry to the back of the line. Producing over 500 million tonnes of steel is no small task, and Chinese steel companies are constantly setting new records. It is only a matter of time before the new man of steel takes up residency in China. He may stay in China for longer than the rest of the world may be comfortable with. Then again, the attitude of the market is set in China’s favor.

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