Steel Market Research Articles

Iron and steel industry of Russia in the XXI century

The author states that over the past twenty years, the iron and steel industry of Russia has held its position as one of the key industries of the Russian economy. Technological upgrading of production facilities has minimized the backwardness, however the rapid steel production growth in Asia has resulted in loosing business in the global steel market, while getting more dependent on the market situation. This article deals with the main trends, problems and collisions of the steel industry development in the first two decades of this century. The structure of Russian steel export is reviewed. This work is based on statistical and comparative analysis, ratings and forecasts, as well as theoretical postulates of Douglas North about the close relationship of market economy processes with political and social institutions of the country. The purpose of the article is to show that the industry is facing impending stagnation under the economic sanctions, export dependency of the Russian steel industry and worldwide steel overproduction. The following may be taken as the scientific results of the study: systematization, generalization and author’s assessment of processes in the Russian steel industry and its development prospects, against the background of global trends in the industry.

EVALUATION OF THE EFFECTIVENESS OF PROTECTIONISM POLICY TOOLS IN OVERCOMING THE CRISIS OF EXCESS CAPACITY IN THE FERROUS INDUSTRY

The article focuses on strengthening of protectionism policy and on trade defense measures, which significantly influence the current global steel market situation. The detailed analyses of the type, product scope and potential effect on international iron and steel market was conducted. The characteristics of the crisis period of exceed capacities problem caused by structural disbalance of global supply and demand in combination with the further steel products consumption decline are presented in the article. The particular focus is on the effectiveness evaluation of protectionism policy on the national level taken the US steel market as an example. The study concludes that protectionism policy of 2017-2019 not only has not solved the global problem of steel exceed capacities, but also escalated national level challenges: lack of motivation of local manufactures to decrease emissions, high unemployment rate and consumer product prices growth. The core outcome of the article is that unbased import trade barriers in steel sector are ineffective for global and national problems solving and that the only way is to implement coordinated actions by the major global steel market players.

Topical Issues of the Technological Development of Advanced Electrical Steel Grade Production in Russia

The growing competition in the global steel market in the field of rolled products potentially implies an efficient, economical and environmentally friendly approach to the production of electrical steel. The following key elements of advanced strip steel casting are discussed: innovations in the use of cast strips for the production of the initial hot-rolled billet and cold-rolled steel from electrical anisotropic and isotropic steel, as well as amorphous steel strips for magnetic cores of electrical machines, which have been commercially applied in world practice.

THE DRIVING FORCES OF CHANGE IN ENERGY-RELATED CO2 EMISSIONS IN THE POLISH IRON AND STEEL INDUSTRY IN 1990-2017

The main purpose of this paper was to identify the driving forces of change in energy-related CO2 emissions in the Polish iron and steel industry in 1990–2017. The analysis relied on the LMDI method used for both the entire study period and the seven 3-year sub-periods. Changes in energy-related CO2 emissions were considered in the context of four factors: the effect of the emission factor; the effect of the energy mix; the effect of energy consumption; and the effect of the production volume of steel. As shown by these analyses, CO2 emissions in the Polish iron and steel industry dropped by as much as over 60% during the study period. That process was primarily driven by a reduction in steel production volumes and in energy intensity of production. In 1990–2017, these factors contributed 48.0% and 50.7%, respectively, to total change in CO2 emissions. Other factors, i.e. emission intensity and energy mix, had a marginal impact. However, the opportunities for further reduction in CO2 emissions seem very limited in the Polish iron and steel industry. That sector is unable to incur the costs of decarbonization investments and requires financial support. Moreover, its continued existence depends on changes to the ETS which will promote low-emission production and will stop the shrinking of the steel market. Thirdly, the steel market needs to be protected against unfair imports, and requires the establishment of the same competition conditions for producers who are not charged with CO2 emission costs.Keywords: CO2 emission, energy use, LMDI decomposition, iron and steel industry, PolandJEL Classifications: Q42, Q43, Q53DOI: https://doi.org/10.32479/ijeep.9444

Estimation of endogenously sampled time series: The case of commodity price speculation in the steel market

We consider the problem of estimating a Markov process that is endogenously sampled. We observe a discrete-time Markov process {pt} at a set of random times {t1,…,tn} that depend on the outcome of a probabilistic sampling rule that depends on the state of the process and other observed covariates xt. We focus on a particular example where pt is the daily wholesale price of a standardized steel product. The endogenous sampling problem arises from the fact that we only observe pt on the days the firm purchases steel. We show how to solve this problem under two different assumptions about firm behavior: (1) optimality: the timing of steel purchases is governed by an optimal purchasing strategy that maximizes expected discounted profits, and (2) potential suboptimality: we allow the firm to use any randomized, Markovian purchasing strategy. In the latter case, the estimation problem becomes semi-parametric and we use the method of sieves to estimate a flexible parametric approximation to the firm’s purchasing behavior that best fits the data without imposing optimality. We show how estimation of this model becomes tractable under either of these assumptions using the method of simulated moments (MSM). We simulate realizations of wholesale steel prices and sample them in the same way as they are sampled in the actual data, i.e. only on days where purchases occur. We use the MSM estimator to estimate a truncated lognormal AR(1) model of the wholesale price processes for particular types of steel plate and test and reject the assumption that the firm is behaving optimally.

Fatigue performance of singular and modular press-brake-formed steel tub girders

The concept of cold-bent shallow press-brake-formed steel tub girders was developed by a technical working group within the Steel Market Development Institute’s (a business unit of the American Iron and Steel Institute) Short Span Steel Bridge Allian

Identification of Energy Efficiency Trends in the Context of the Development of Industry 4.0 Using the Polish Steel Sector as an Example

The steel sector is crucial for the national economy of Poland and the global economy. In response to the challenges of the global steel market and the need to increase the sector’s competitiveness, a number of actions have been taken to increase the energy efficiency of steel production. Based on the synthesis of the literature and our own research, we describe the issues related to energy efficiency and the Industry 4.0 concept. The main aim of this paper is to identify energy efficiency trends in enterprises, especially those that focus on increasing the energy efficiency of production processes, and to make recommendations for investment policy for the Polish steel sector in the era of Industry 4.0. To achieve our goals and answer the research question, we used data from 2000–2019 for the Polish steel industry. The calculations and models in this paper were made by using Gretl software. Using direct research, an econometric model was built that verified the hypothesis regarding the relationship between investment in new technologies and the energy efficiency of steel production. Future investment policies should take the implementation of Industry 4.0 tools in the steel sector into account, which, according to the authors, will measurably improve energy efficiency.

Prospects of the Development of the Russian–Austrian Business Cooperation in the Metallurgical Sector of Global Economy

A high volatility of the indices characterizing economic relations under the conditions of relative steady production in the recent years has been detected by analyzing the economic and production activities of Russian and Austrian metallurgical corporations. The prospects of development of the Russian–Austrian business cooperation on the global steel market are positively evaluated.

Granger causality transmission mechanism of steel product prices under multiple scales—The industrial chain perspective

The steel industry is a basic industry of the national economy, and its product structure is complicated. Due to price differences, the prices of products of different varieties, specifications and origins affect each other and transmit each other. In addition, the steel industry covers the stages of product selection, smelting and processing. The transmission patterns between product prices at different stages also vary. At the same time, the steel industry has been confirmed to be a typical cyclical industry. Thus, our work mainly explores the transmission relationship between steel product prices under multiple timescales from the perspective of the industrial chain. First, we use discrete wavelet transform to extract the time series of 553 steel products at different timescales. Second, based on the Granger causality test, the transmission relationship between every two products is measured. Third, by constructing multiscale steel product price transmission networks, important steel products with different roles are identified. Finally, based on motif recognition, the main modes of product price transmission between different reaches of the industrial chain are summarized. The results show that as the timescale increases, the transmission between products becomes increasingly frequent and that the transmission patterns become increasingly clear. In general, there is a high probability of occurrence of important steel products in hot rolled coils, structural steel and medium and heavy plates, especially 4.75 mm and 3 mm hot rolled coils produced in Beijing and 4.75 mm hot rolled coils produced in Beijing and Zhengzhou. In addition, the transmission of steel products at different stages has undergone a process of transmission between two stages to transmission among three stages and then to transmission between two stages. In this regard, under 4–8 days, transmission within a stage and transmission among three stages is the most frequent transmission pattern. Our work will help investors and policy makers gain an in-depth understanding of the steel market and mitigate risks in investment and the policy development process.

A DEA-based empirical analysis for dynamic performance of China's regional coke production chain

Coke plays a critical role in China's national economic activities in the past several decades. However, because of the twofold pressures from the sustainability-concerned public and the international steel market downturn, China's coke industry steps into a dilemma. To provide the industry with quantitative guidelines of resolving its current problems, an empirical analysis for dynamic performance of China's regional coke production chain from 2006 to 2011 is demonstrated. Through adopting the slacks-based measure (SBM) in Data Envelopment Analysis (DEA) and a famous dynamic network DEA framework, this paper simplifies the coke production chain into a three-stage process, and captures the interactions between intermediates inside each stage. The results show that: (i) In the stage of coke supply, central China performs at the highest efficiency level, followed by eastern China, with western China being the worst. (ii) In the stage of production (direct consumption of coke), the efficiency of eastern China is relatively high compared to the other regions. (iii) In the stage of consumption of industrial products, the efficiency of eastern China is better than that of central and western China. (iv) In terms of integrated efficiency, the province of Jiangsu is the highest.

Research on the Influence of Bounded Rationality and Product Differentiation on the Stability of Steel Industry Market

At present, the problems of homogenization and low quality in China’s iron and steel industry are particularly prominent and the ability of the enterprises to cope with change is insufficient. Adopting product differentiation strategy and dynamic adjustment strategy can allow steel enterprises and the industry to better adapt to future changes. By introducing the product differentiation degree (substitution coefficient) and the bounded rationality strategy to simulate these two strategic means, this paper constructs an extended two-stage dynamic game model to analyse the dynamic game scenarios and steel market stability in China. As new findings, we report the following: (1) The system is more likely to fall into an unbalanced state when multiple enterprises adopt the policy of dynamic output adjustment simultaneously. (2) Enterprises with large output and small output have different output adjustment policies. When enterprises with big-scale output adopt a bit larger adjustment policies, enterprises with small output will be strongly impacted, and the available adjustment space will be sharply compressed. (3) The gradual increase in the difference between products reduces the stability of the market. (4) When product differentiation and bounded rationality strategies coexist, the steel market may fall into an unbalanced state when the degree of product difference increases excessively and the enterprise adopts more drastic output adjustment policies. Therefore, there are pros and cons to product differentiation strategy and bounded rationality adjustment strategy. When each steel oligopoly enterprise formulates a production plan, it needs to comprehensively consider the output changes of the other enterprises and carefully weigh the strategic issues.

Управління капіталом акціонерних товариств за зростання нематеріальних активів

The article provides an assessment of the value of an enterprise in the context of an increase in the capitalization of the country's economy as the most important factor in strengthening competitive advantages on the example of the market of steel and iron casting for car building. It has been substantiated that the valuation of the enterprise is limited by the poor development of the domestic securities market, since the growth potential of the current value of shares is not taken into account, depending on the perception of the value of the brand and related intangible assets. It is generalized that the existing directions of effective assessment of the cost of the production potential of an enterprise when organizing the release of new products, subject to investment in modern technologies and technological solutions, are not able to provide a significant inflow of investments in the required volume, especially in intangible assets. The analysis of the factors of formation of the potential for growth and the current value of the enterprise for shareholders is carried out according to two main elements: the present value of future cash flows in a specific forecasting period; long-term value of shares depending on the perception of the value of brands and related intangible assets, that is, research and development work, concluded contracts, brand name, new technologies and technological solutions, and the like. The main factors of the strategic prospects for building up intellectual capital in conjunction with an increase in product sales, it is advisable to include the growth of market capitalization. The key factors in the growth of market capitalization are technologies and technological solutions of innovative types of products: steel ingots, which are used to produce pipe billets used in power units and nuclear power plants; rear axle housing of KrAZ heavy-duty vehicles; automatic couplings designed for the transmission of shock and traction forces devices for placing the mechanism, together with which the coupling and uncoupling of the cars is carried out; steel castings for pipeline fittings; draft gears are designed to mitigate longitudinal forces transmitted through the automatic coupler to the frame and other parts of the car.

Socio-economic aspects of steel production in conditions of Russia agriculture machinery demand increase

The paper is devoted to the study of socio-economic aspects of the production of Russian steel. A distinctive feature of the Russian steel industry is that it is deservedly considered one of the basic sectors of the national economy. The paper proves that the dynamics of production began to serve as an indicator of the development of the Russian industry and economy. It is shown in which industries steel is used in the national economy. The paper shows that steel production plays a special important role in the Russian economy. The place of Russia in the world steel market is shown. The ranking of the leading countries in the production of steel is presented. The authors have substantiated and highlighted the following main socio-economic aspects of steel production in Russia: production and economic; social; financial;environmental and integration. It is stated that the revealed aspects determine state and development prospects of Russia’s metallurgical complex.It is also shown that the systemic crisis in production is aggravated by the social aspect. The influence of the production of steel on the formation of aspects of the vital activity of the population in Russian single-industry cities is revealed. Steel enterprises form the industrial specialization of such cities and significantly affect the vital activities of people. The authors have made use of the material concerning the features of mono-industrial cities located in the Arctic zone of the Russian Federation; special attention has been paid to the residents’ socialproblems.

The place and the role of Ukraine’s steel industry on the global steel market in 2013-2018

In the paper studied dynamics of the place and the role of Ukraine’s steel industry on the global steel market in 2013-2018. It is defined that against the background of the emergence of new leading countries in the steel production, the general unfavorable situation on the global steel market and military operations on the Donbass a decrease of steel production, consumption, export and import of metal products in Ukraine are observed. It is revealed that the assortment of manufactured and exported products is non-competitive. As a result, there are a further decrease of the country’s share in global indicators and an increase of domestic steel industry’s dependence of the global conjuncture. Keywords steel industry, global steel market, production, consumption, assortment, exports-imports of steel products, place and role of Ukraine.

Implementation of the Blue Ocean Strategy Using Simulation: Firm-Level Evidence from Russian Steel Market

This paper reports a methodological approach to quantitatively assess the effectiveness of the Blue Ocean Strategy in the Russian steel market that makes the competition irrelevant. Based on the simulation method, qualitative and quantitative dependencies are determined between firm economic performance and the implementation of the Blue Ocean, Red Ocean, and Monopoly strategies. It is shown by the example of the Russian steel market that Blue Ocean Strategy enables to get a significantly higher level of profit for the enterprise as compared to the implementation of the Red Ocean Strategy, even in a monopolistic market. This is provided by creating innovative value, manifested in the minimization of social losses in the market, ensuring the possibility of establishing a higher market value while reducing production costs. The results of the paper may serve as an aid to the effective development of small and medium-sized businesses by providing a sound quantitative framework to quantify the value of innovation. This article gives an insight into how firms can create blue oceans of uncontested market space to prosper in the future, providing an opportunity to evaluate the effectiveness of the chosen strategy to minimize risks.

CORROSION BEHAVIOUR OF AISI 460LI SUPER-FERRITIC STAINLESS STEEL

Following nickel and molybdenum significant price increase, nowadays the stainless steel market is moving toward an increasing use of ferritic stainless steel instead of austenitic stainless and therefore to the development of advanced ferritic stainless steels grades aimed to substitute the more expensive austenitic materials in all applications allowing it. Super-ferritic stainless steels are higher chromium (Cr) and molybdenum (Mo) steels with properties similar to those of standard ferritic alloys. Such elements increase high temperature and corrosion resistance in strong environment. This paper deal about the corrosion reistance of super-ferritic stainless steels with a Cr content ranging from 21% to 24%.

Use of SAP in the Implementation of the Activities-Based Costs - The Case of Steel Companies

The efforts of the companies’ managers are directed towards the calculation of the costs, because, if they can control the costs, the profits will appear. The possibility to act on the costs implies not only the intervention on the causes that have generated them, on the needs of the organization, but also on the expenses related to the production capacity. Cost information is essential, as managers cannot fulfil their responsibilities to the company, as long as they do not have enough information about the size and evolution of costs, as well as the implications they can have on the economic performance of the company. In this context, in order to meet the challenges of the global steel market and the changes in the economic environment, the steel companies have decided to implement the ABC method, for a pertinent vision on the full costs, using the managerial accounting module within SAP. This is a reliable and validated solution, which supports the development of the company.

Influence of the Production Factors and Export–Import Metal Trading Operations on the State of the Art of the World Steel Market

The influence of export–import operations on the steelmaking production and the consumption of steel products in the world after the 2009 global financial crisis is estimated. Export is shown to prevail over import in terms of the rolled products in CIS, Asia and the world market, and export operations with first-stage cast steel products are most popular on the CIS market. The European market is characterized by a lower concentration of contractors participating in international export–import operations in comparison with the world steel market and its regional segments. The possibilities of expansion and intensification of metal trading on the world market are analyzed using the concept of bifurcation points for the distribution of a product on a market and information about this product.

Transformation of the World Steel Market Under the Influence of General Industrialization and Digitalization of Industry

The current global transition to a new phase of development under the influence of the Fourth industrial revolution is characterized by the emergence of end-to-end technologies, increasing the speed of introduction of new developments, reducing the life cycle of products, the emergence of new players, strengthening trends in digital transformation. Against the background of the formation of the digital economy, a limited group of leading countries focused on the use of renewable resources and possessing advanced production technologies is emerging.

Energy Prices and their Impact on the Competitiveness of the EU Steel Industry

An essential part of the EU's growth strategy is support to its own international competitiveness. The reason is that the domestic industry is losing its former positions and is being pushed out of both domestic and international markets. Developments on the international steel market over the last year confirm that the market is likely to see significant changes as a result of protective measures. Most of them will jeopardise the international competitiveness of the European steel industry with negative impacts on its overall economic growth. The aim of this paper is to analyse the influence of energy prices and, based on an international comparison of production conditions, identify the comparative advantages of the EU in this segment. For this purpose, use will be made of the RCA indicator and other research methods. The authors formulate some statements concerning the future development of this sector and the conditions which need to be satisfied to boost its competitiveness.