State enterprises in the steel sector

Abstract

This report assesses the extent and implications of the presence of state enterprises in the steel industry. The key results can be summarised as follows:  Although state enterprises are relatively low in numbers compared to private enterprises, they account for an important share of global crude steel production. In 2016, 22 of the world's 100 largest steelmaking companies were state enterprises. State enterprises represented at least 32% of global crude steel output in 2016.

Quantifying industrial strategies (QuIS)

“…For example, there might be skills policies provided through subsidies to on-the-job training related to ICT skills (OECD, 2012 [37]); or grants directed to skills needed for renewable energy production (e.g. The Green Jobs Act in the US (Martinez-Fernandez, Hinojosa and Miranda, 2010 [38])).…”

The changing characteristics of steel firms

“…Together with EAF technology, which accounts for slightly less than a third of global capacity (31.4%), these are the two predominant steel production routes. and induction furnaces (IF) still account for less than 0.7%, despite some recent interest possibly related to low set up costs and higher flexibility (Hijikata, 2020 [8] ). In the absence of a shift towards other technologies in the medium-term, iron ore, coking coal and other key steelmaking ingredients for the BOF technology will continue to be in high demand.…”

“…7 This is in line with Shin and Stulz (1998[31]) who cast doubts on the efficiency of internal capital markets. 8 For the purpose of the financial analyses, the term plant refers to all steelmaking plants that produce financial accounts. If the accounts are only available at the level of the corresponding parent company, the capacity of the plant is used to input the company's financial performance to the plant.…”

“…IF technology is also very heterogeneous and while certain IF equipment may be expensive to install and produce highly specialised steel products, other may be considerably cheaper to install and operate, and be used to produce low grade steel products. See Hijikata (2020 [8]) for further details.…”