China’s dominates the world raw steel production and displays an historically unprecedented exponential growth
Current state of Chinese raw steel production
China produced more than half of the world’s steel over that last 6 years. The treemap below breaks down steel production per each advanced steel producer country and the rest of the world. From 2016-2022, China produced 52.54% of the world’s raw steel, seconded by Japan at 5.34%.
In China, who produced all this steel? The great majority is directly produced by the Chinese state. From the 2.46 billion tons of raw steel produced by the 24 top steel producing enterprises in China, 68.87% was produced the Chinese state.1
| China’s Ranking | Wolrd Ranking | Company | Type | Owner | State Owned % | Total Steel Produced 2015-2020 |
|---|---|---|---|---|---|---|
| 1 | 1 | China Baowu Steel Group | State-owned | Central Government (100%) | 100% | 407,400,000 |
| 2 | 3 | Hesteel Group | State-owned | Hebei Providence (100%) | 100% | 229,000,000 |
| 3 | 4 | Shagang Group | Privately-owned | Shen Wenrong (29.32%) | 0% | 195,100,000 |
| 4 | 7 | Ansteel Group | State-owned | Central Government (100%) | 100% | 248,100,000 |
| 5 | 9 | Shougang | State-owned | Beiging Capital Management Center (100%) | 100% | 145,100,000 |
| 6 | 11 | Shandong Iron and Steel Group | State-owned | Shandong Providence (100%) | 100% | 126,400,000 |
| 7 | 8 | Jianlong Steel | Privately-owned | Beijing Jialong Investment Co. Ltd. (94%) | 0% | 132,400,000 |
| 8 | 14 | Valin Steel Group | State-owned | Hunan Providence (97.26%) | 100% | 109,800,000 |
| 9 | 19 | Benxi Steel Group | State-owned | Liaoning Providence (100%) | 100% | 79,700,000 |
| 10 | 17 | Fangda Steel | Privately-owned | Beiging Fanga International Industrial Investment Co. Ltd. (99.20%) | 0% | 79,600,000 |
| Totals | 1,752,600,000.00 |
From the top 10 producers of raw steel, 76.77% of steel is produced by the state. The remaining 23.23% privately produced steel is not insignificant. However, the political intermingling of the Chinese steel private enterprises with the Communist Party of China (CPC) ties private production to state central planning. Shen Wenrong is the largest individual owner of stocks in Jiangsu Group, the biggest private raw steel producer. Wenrong was a deputy party secretary of the Zhangjiagang municipality and representative of the 16th and 17th Communist Party of China National Congress. In Jianlong Steel, the second largest private producer of raw steel in China, Zhang Zhixiang is the main stockholders of the steel company (through the firm Beijing Jianlong Investment Co. Ltd.). Zhixiang was a deputy of the 10th National People’s Congress of Hebei Province in 2003-2008. He was also deputy of the 12th National People’s Congress of Heilongjiang Providence in 2013.2
Historical development of the Chinese raw steel industry
The stream graph below displays not only the exponential growth behavior of raw steel production in China compared to other countries, but it also indicates how steel production in China is not regulated by the oscillating dynamics of the market unlike the rest of the word.
In every economic crisis, you can see that the world contracts its steel production and its growth its stultified by the prospects of profitability dependent on the dynamics of demand and supply in the world market. China, exerting its state planning, manifest a degree of immunity to the depressive effects of the market unlike any other country. This is particularly true for the World Economic Crisis of 2008, where China kept increasing production while the rest of the world reduced steel production.3 4
The linear graph above displays China’s raw steel production growing exponentially at a rate of 16.36% per year from 1949 to 2022. No other country in the history of steel production from 1917 until today has displayed this exponential growth behavior. The only other country that has display a significant form of regularized growth in the raw steel production industry has been the Soviet Union. The Soviet Union was able to maintain an uninterrupted linear progression of development from 1947 to 1978. During this period, the Soviet Union increased steel production by 4.42 million tonnes per year before it met a plateau of ten years and then a collapse after the fall of the Soviet Union.5
Methodology
The data used is from the World Steel Organization, which I acquired through a direct information request. The raw data from the World Steel Organization was delivered through an Excel file, which I then turned into a Python Pandas data frame in order to create interactive Plotly graphs6
The Jupyter Notebook through which I coded the data frames and plots is here (link).
Limitations
Information on ownership of the major Chinese steel producing enterprises is relatively old, as of 2016. However, this is one of the best documents that I was able to find that summarizes the ownership structure of the each of the major steel producing companies in China. Furthermore, the producers of the document are the American steel producing associations, representing the most upfront opinion and position of industrial and finance capital in regards to the Chinese steel industry.
- Data collected on world’s and China’s steel production from World Steel Organization through information requests.
- Steel Industry Coalition. “Report on Market Research into the Peoples Republic of China Steel Industry.” June 30, 2016. Link.
- The stream chart seems to have a deep indention on China’s category of raw production during the 2008 World Economic Crisis, but this is only the reflection of symmetrical effect of the stream chart from top to bottom. If you observe the upper part of China’s stream you can see a compensatory protruding spike demonstrating that China continued its exponential steel production growth despite the collapse of the world market.
- Also, notice the drastic shrinkage of the steel production capacity of the former USSR around 1991 after capitalist restoration that lead to the a drastic deindustrialization of Russia.
- To see the development behavior of the Soviet Union or any other country, note that you can filter out countries by clicking legend categories and zoom in by dragging your mouse around the time period of interest.
- Juacho. “China’s Steel Production Analysis for Blog.” Feb. 2023.Github.com. Link.