Life Cycle of Steel Industry

The steel industry is showing stagnation in the upper maturity after global financial crisis in 2008. During maturity stage, profit margins becomes slow or stagnant, lose distinction of production and expending equipment or over rate of operation following demand. The case of steel industry experiences that they lose the competitive advantages in basic steel products with others, China and India, which gradually satisfy or expend domestic demands. In addition, each country, especially EU and USA, is signs of implement of spurring limit of import in order to surviving or protecting own products.

After oil shock in 1970s, developed steel countries decided improvement of facilities and diversifications. Their competitiveness were completely recovery into 21st century as dramatically increasing their demand with waking potential demands of emerging developing country in fastest economic growth. However, as least steel countries expends facilities and creates an excessive supply, the developed steel countries get a blow in export and regional market from invading low price of production. Such above views represent the market of steel gradually becoming disappearing difference of production and the place of cutthroat competition.

The steel industry is process industry which needing to huge whip-out as capital and intensive technology. And this type industry is highly cyclical industry. According to above special part of steel industry, into 21st century, customer demand was rapidly rising, it dramatically decreases due to financial crisis in 2009 as being daunted other industries like car industry. It encourages stagnant demand from being congested the volume of customer demand. To make matters worse, as excessive supply of China, demands of others suffer a heavy blow in export and import. Because of this, the industry faces hyper competition of cost and price.