Where does steel come from?

In 2025 China produced 980 million tonnes of raw steel, 52% of the world's 1.9 billion tonnes (USGS MCS). India followed with 8.4%, then United States (4.3%), Japan (4.3%) and Russia (3.4%). The top five account for 72%. Pig iron, the molten iron from blast furnaces that feeds most steelmaking, came to {{prod.Pig iron.world}}, led by {{prod.Pig iron.top1.name}} with {{prod.Pig iron.top1.share}} (USGS MCS).

One country makes more steel than the rest of the world combined, which is a genuinely unusual degree of concentration for a product this fundamental, and it happened within about twenty-five years. The gap between raw steel and pig iron figures is informative: where the two are close, a country makes steel mainly from iron ore in blast furnaces; where raw steel far exceeds pig iron, it is recycling scrap in electric arc furnaces. The United States is the clearest example of the second model, with the large majority of its steel made from scrap.

Steel is not one product but hundreds. Long products, rebar, sections and wire rod, go into construction. Flat products, hot-rolled and cold-rolled coil and plate, go into vehicles, appliances, pipe and machinery. Stainless, described on the chromium page, is a separate and much smaller market. The grades are not substitutable and the mills that make them are different, so a shortage of one can coincide with a glut of another.

World output changed +1% on the previous year. Steel demand tracks construction and manufacturing investment more closely than consumer spending, which is why it is treated as a leading indicator of industrial activity.

China was the largest exporter of hot-rolled steel coil (HS 7208) in 2024 with 28% of world export value, ahead of Japan (14%), on world trade of $69.1 billion (CEPII BACI). Vietnam was the largest importer with 9.3%.

Only a modest share of world steel crosses a border, because it is heavy and cheap relative to freight and because most countries protect their mills. That protection is the defining feature of the trade: steel is the most frequent subject of antidumping and safeguard actions of any manufactured product, and duty schedules rather than costs often determine who supplies whom. The other feature is that trade flows in semi-finished form as well as finished: slab and billet move from countries with ore and coal to countries with rolling mills but no ironmaking, which is a large and often overlooked part of the trade.

This page quotes no steel price, because there is no free public benchmark. Hot-rolled coil, the closest thing to a reference product, is assessed regionally by private price reporting agencies, free-on-board China, ex-works Northern Europe, and Midwest United States, and those assessments differ by hundreds of dollars a tonne at the same moment because trade barriers keep the regions apart. Futures on CME, SGX and the Shanghai and Dalian exchanges settle against those private indices.

What this site can show is the input side, and it is more informative than a single steel quotation would be. A blast furnace route mill buys iron ore and coking coal, and the spread between the finished steel price and the cost of those inputs is what determines whether it runs. Both inputs have benchmark series on this site: see the iron ore and coal pages. An electric arc furnace mill buys scrap and electricity instead, so its economics follow the scrap price and the power tariff.

The useful mental model is that steel is a conversion margin business. Mills do not really sell steel; they sell the transformation of ore and coal, or scrap and power, into a product, and their profit is the spread. When Chinese mills expand output into a weak market, that spread compresses worldwide, which is why steel trade disputes are so persistent: overcapacity in one country compresses margins everywhere it can ship.

China makes more than half the world's steel and consumes most of it domestically in construction. Property starts and infrastructure spending there therefore drive world steel demand, and a Chinese property downturn pushes surplus steel into export markets, depressing prices and triggering trade actions elsewhere.

For blast furnace mills these two inputs dominate variable cost. When ore or coal prices spike, the conversion margin compresses and higher-cost mills bank furnaces. The relationship runs both ways: mill cuts then reduce ore and coal demand, which is why the three markets move together.

Electric arc furnaces melt scrap, and their share of world output is rising as decarbonisation policy favors them. Scrap availability depends on how much steel was consumed decades earlier and on collection infrastructure, so mature economies have plenty and fast-growing ones do not. Scrap price sets the floor for the whole product.

Antidumping duties, countervailing duties and safeguard quotas are more consequential in steel than in almost any other traded good. A duty determination can close a market to an origin within weeks, redirecting flows and creating price differences between regions that persist for years.

Blast furnaces emit around two tonnes of carbon dioxide per tonne of steel, so carbon pricing, border adjustment mechanisms and the cost of switching to hydrogen-based direct reduction now sit directly in the cost structure of European mills and increasingly elsewhere.

Steel plants are enormous, long-lived and politically difficult to close, so overcapacity persists far longer than in most industries. Governments repeatedly support loss-making mills for employment reasons, which prolongs downturns and is the root cause of chronic trade friction.

Flat products depend on vehicle and appliance production, which is more cyclical and more sensitive to interest rates than construction. A car contains around a tonne of steel, so vehicle output translates directly into flat-product demand, and the shift to electric vehicles changes the grade mix toward electrical steels.

There are two routes and the distinction runs through everything else on this page. The integrated route starts with iron ore, which is sintered or pelletised and charged into a blast furnace with coke and limestone. Coke, made by baking coal in the absence of air, both provides heat and chemically strips oxygen from the ore, producing molten pig iron with a high carbon content. That iron goes to a basic oxygen furnace where oxygen is blown through it to burn out the excess carbon, producing steel. Roughly seven-tenths of world steel is made this way.

The electric arc route melts scrap, and sometimes direct-reduced iron, using graphite electrodes that strike an arc through the charge. It uses a fraction of the energy of the integrated route and emits far less carbon dioxide, but it depends on scrap availability and on the impurities that come with scrap, which limit the grades it can make without careful sorting or dilution with virgin iron units.

Either way the liquid steel is refined in a ladle, where alloying elements are added, then continuously cast into slabs, blooms or billets. Those semi-finished shapes are reheated and rolled: slabs into flat products, blooms and billets into sections, rebar and wire rod. Flat products may then be cold rolled, annealed, coated with zinc or aluminium-zinc, and painted.

Direct reduction is the third route and the one that matters for the future. It uses natural gas, or increasingly hydrogen, to strip oxygen from ore in the solid state, producing direct-reduced iron that feeds an electric arc furnace. Combined with clean electricity, this is the main credible path to low-carbon primary steel.

Construction takes roughly half of all steel: rebar and structural sections in buildings and infrastructure, sheet piling, and the reinforcing that makes concrete work. This is why steel demand tracks construction cycles and why Chinese property has been the dominant global variable for two decades.

Mechanical engineering and machinery take the next largest share, followed by automotive, where a vehicle contains around a tonne across body, chassis, engine and components. Metal goods, appliances, packaging in the form of tinplate cans, and electrical equipment absorb the rest. Pipe and tube for oil, gas and water is a large specialized market with its own grades and pricing.

Steel's most underrated property is recyclability. It is magnetic, easily separated from mixed waste, and can be melted repeatedly without meaningful loss of quality, which is why it is the most recycled material on earth by weight. That recycling loop is also why the industry's decarbonisation path runs through electric arc furnaces: the scrap already exists, and melting it is far less carbon-intensive than making iron from ore.

An integrated steelworks is one of the largest single industrial installations ever built, combining coke ovens, sinter plant, blast furnace, oxygen converter, casters and rolling mills on one site with its own port. Because a blast furnace cannot be stopped and restarted casually, a campaign runs for fifteen to twenty years between relines, and mills run continuously through demand downturns rather than idling. That inflexibility is the source of the industry's chronic overcapacity problem.

The raw material chain feeding it is one of the largest bulk shipping operations in the world: iron ore from Australia and Brazil and coking coal from Australia, Canada and the United States, moving in capesize vessels to China, Japan, Korea and Europe. The chokepoints are the Pilbara and Brazilian export ports and the Australian coal terminals, and weather disruptions there register in ore and coal prices within days.

Electric arc mills have a different and more local chain: scrap collected within a few hundred kilometers, electricity from the grid, and graphite electrodes, which are a specialized product made from petroleum needle coke and were themselves the subject of a severe shortage in 2017 and 2018 that raised steelmaking costs worldwide.

The decarbonisation transition is the structural risk and opportunity. Replacing coal-based ironmaking with hydrogen-based direct reduction requires enormous quantities of clean hydrogen and electricity, and where a mill can get those cheaply is not necessarily where mills are today. Several European producers have concluded that it is cheaper to make iron near cheap renewable power and ship it, which would separate ironmaking from steelmaking geographically for the first time since the industrial revolution.