AME’s estimate for world’s crude steel production is 1,975Mt. India, Japan, US, Russia, and Korea follow China with a 22% combined participation in global supply. The global top five companies produce more than 13% of worldwide crude steel output. 

Luxembourg-based ArcelorMittal is the leading steel company with estimated total production of 80Mt in 2021. The Chinese HBIS Group has a 2.4% share with 46Mt, and Baoshan Iron & Steel has 2.1% with 42Mt, taking second and fifth place, respectively. Japan's Nippon Steel Corp. comes 3rd with 46Mt and JFE Holdings 6th with 33Mt. Significant participation of Korean POSCO places 4th with 44Mt. Additionally, Indian Tata Steel Group with 30Mt and JSW Steel with 26Mt.  These companies account for the largest metallurgical coal consumption for steel production.

ArcelorMittal

ArcelorMittal reported significant improvements in operating performance during the first quarter of the year. This reflects the continued demand recovery in the steel market, higher utilization, and low inventories. Its Brazil and ACIS segments reported 11.4% and 9.3% higher steel shipments, respectively.

The company’s growth plans include the construction of new 1.5Mt EAF to be completed by the first half of 2023. Likewise, it has also resumed Vega’s galvanizing expansion project in Brazil. The new investment of US$350m, will have capacity of 0.7Mt with continuous annealing line (CAL) and continuous galvanizing combiline (CGL). The purpose is to support growth in the advanced high-strength steel (AHSS), particularly in the automotive industry.

AME forecasts ArcelorMittal will keep its leading position in the medium and long term with the highest production participation in the steel global market. AME estimates the company will produce around 82.2Mt crude steel in 2025 and will continue stable until 2040 as steel will be essential in the energy transition to low carbon scenarios. 

Tata Steel

AME’s 2021 crude steel production forecast for India is 113Mt, up 12.8% y-o-y. JSW Steel and Tata Steel are the largest producers from the Southeast Asian country. Tata Steel is forecast to increase crude steel output from 30Mt in 2021 to 35Mt in 2025 improving its ranking on the world’s top ten. Having their own supply of iron ore and coal from domestic and international sources increase their competitivity.

March quarter was reported as the highest ever consolidated earnings with a production of 4.75 Mt in India. Tata Steel Jamshedpur Works with a crude steel capacity of 10Mt, and is the first integrated steel plant in India, with operations since 1912. The products are provided to Tata Motors and other downstream facilities in the domestic market. The plant is conveniently connected via railroad, for effective distribution of HRC, CRC and coated products for the automotive industry.

New Markets for Australian Coking Coal

Eight months after China enforced the informal ban on Australian coal imports, steelmakers still face the giant task of obtaining sufficient coking coal with the largest source of imports removed. While North American countries try to fulfill the supply for the Chinese steel industry, other Asian and European markets have taken this opportunity and led the world’s largest metallurgical coal exporter to explore new markets.  

Coking coal once sold to Chinese steel mills has now been redirected to several countries such as India, Japan, Korea, Vietnam, Taiwan, and Luxemburg. Asia-Pacific region is expected to dominate the market across the globe with the largest consumption of steel in China and India.  Metallurgical coal exports of the state of New South Wales (NSW), Australia shows India has significantly covered the void left by China, but Australia still faces challenges to reach pre-ban exports numbers.

For the first three quarters of the current financial year (Jul 2020-Mar 2021), NSW exports to China decreased 87.8%. More than half of this drastic drop was covered by imports from India representing a 33% increase y-o-y. As India overcomes its recent Covid-19 crisis, a strengthened coal business between the two countries will be beneficial for Australia in the medium and long term as Indian companies are forecast to increase metallurgical coal demand over the coming years. Additionally, imports of hard coking coal from Japan and Taiwan increased for the same period while new trade flows have been established with Luxembourg and Malaysia.

Even though American suppliers are increasing their coking coal production to meet China’s demand, Chinese steel producers will still struggle to find the quantity and quality Australia coal offers. AME anticipates political tensions between both countries will have to ease if the Chinese government keeps the robust pace of its manufacturing industry.