Canadian Steel

How have Canadian steel manufacturing companies faired in global markets? What does the new US-Japan ‘partnership’ mean to American steel producers? Interesting dynamics are in play.

Trump Announces US Steel–Nippon Partnership Deal

Emel Akan, posted an article today at the Epoch Times with the above title.

My wife asked me if this new US-Japan partnership will eat into the market for Canada’s steel producers. You may be asking yourself the same question.

👁️ GROK says the following.

🕵️‍♂️ Based on the most recent data from the World Steel Association for 2023, here are the world’s ten largest steel-producing companies, ranked by crude steel production volume in million metric tons (Mt):

1. China Baowu Group (China) - 130.8 Mt

2. ArcelorMittal (Luxembourg) - 68.3 Mt

3. Ansteel Group (China) - 53.0 Mt

4. Nippon Steel Corporation (Japan) - 43.2 Mt

5. HBIS Group (China) - 42.0 Mt

6. Shagang Group (China) - 41.0 Mt

7. POSCO Holdings (South Korea) - 38.6 Mt

8. Jianlong Group (China) - 36.6 Mt

9. Shougang Group (China) - 33.8 Mt

10. Tata Steel (India) - 30.2 Mt

Notes:

• Production figures are approximate and based on official tonnage declarations from the World Steel Association.

• For Chinese companies, data aligns with the China Iron and Steel Association (CISA) unless otherwise specified.

• Ownership details (e.g., subsidiaries like Xinyu Steel for Baowu or AM/NS India for ArcelorMittal) are factored into the totals as per World Steel Association methodology.

• Rankings reflect 2023 data, with minor shifts noted from 2022 (e.g., HBIS Group and Shagang Group swapped positions).

👁️ Where does Canada rank in this list of world steel producers.

🕵️‍♂️ Based on 2023 World Steel Association data, Canada produced approximately 12.8 million metric tons of crude steel, placing it around 17th globally among countries.

👁️ Historically, when was Canadian steel manufacturing at its peek compared to those producers in other countries?

Historical Peak of Canadian Steel Manufacturing

Determining the exact historical peak of Canadian steel manufacturing relative to other countries requires examining crude steel production data, economic context, and global rankings. Based on available data, Canada’s steel production peaked in the late 20th century, particularly during the post-World War II economic boom, with significant output in the 1970s and early 1980s. Here’s a detailed analysis:

Canadian Steel Production Peak

• Timing and Volume: Canada’s crude steel production reached its historical peak in 1977, with an output of approximately 15.9 million metric tons (Mt) of crude steel, according to historical data from the World Steel Association and other sources. This was during a period of strong industrial demand driven by postwar reconstruction, infrastructure development, and growth in industries like automotive and construction.

• Key Regions and Companies: The steel industry was concentrated in Ontario (Hamilton and Sault Ste. Marie) and Quebec, with major players like Stelco (now U.S. Steel Canada), Dofasco (now ArcelorMittal Dofasco), and Algoma Steel. Hamilton was a steel hub, hosting some of Canada’s largest plants.

• Economic Context: The postwar economic boom (1940s–1970s) saw rapid global demand for steel, and Canada benefited from its proximity to the U.S. market, exporting significant volumes. The introduction of the Basic Oxygen Process (BOP) by Dofasco in 1954 enhanced efficiency, helping Canada keep pace with global advancements.

Comparison to Other Countries

To assess Canada’s peak relative to other countries, we can compare its 1977 production to global leaders at the time, using World Steel Association data and historical trends:

• Global Context in 1977:

  • United States: The U.S. was a leading steel producer, with production peaking around 127 million Mt in 1973, declining slightly to around 110–120 Mt by 1977 due to global competition and economic shifts. Canada’s 15.9 Mt was about 13–14% of U.S. output, reflecting a significant but smaller role.

  • Soviet Union (USSR): The USSR was the world’s top producer in the 1970s, with output peaking at around 150 Mt in 1977, dwarfing Canada’s production (Canada’s output was ~10% of the USSR’s).

  • Japan: Japan’s steel industry surged post-WWII, producing around 100 Mt in 1977, making it the second-largest producer. Canada’s output was ~16% of Japan’s.

  • China: China’s steel production was growing but not yet dominant, with ~37 Mt in 1977, still more than double Canada’s output.

  • European Countries: Germany (West Germany) produced around 40 Mt in 1977, and other European nations like France and the UK each produced 20–25 Mt, all significantly outpacing Canada.

• Canada’s Global Ranking: In 1977, Canada ranked approximately 10th–12th globally in crude steel production, behind major players like the USSR, USA, Japan, Germany, China, Italy, France, and the UK. Its production was notable but modest compared to these industrial giants. Smaller producers like South Korea and Brazil were beginning to emerge but were not yet surpassing Canada.

Relative Strength and Decline

• Canada’s Strengths:

  • Proximity to U.S. Market: About 90% of Canada’s steel exports went to the U.S., with 50% of its production exported, making it a key supplier for American industries like automotive.

  • Low Carbon Footprint: Even historically, Canadian steel production benefited from relatively clean energy sources (e.g., hydroelectricity in Quebec), giving it an environmental edge over competitors like China.

  • Technological Adoption: The shift from the Bessemer and open-hearth processes to the BOP in the 1950s–60s kept Canada competitive.

• Post-Peak Decline:

  • After 1977, Canada’s steel industry faced challenges from global overcapacity, particularly from China, which began flooding markets with cheap steel in the 1980s–2000s.

  • By 2001, cheap imports (e.g., 44% market share in Canada during the early 2000s downturn) led to a 96% profit decline for companies like Stelco.

  • By 2023, Canada’s production had fallen to 12.8 Mt, ranking it ~17th globally, reflecting a significant decline from its 1977 peak.

  • All major Canadian steel mills are now foreign-owned (e.g., ArcelorMittal Dofasco, U.S. Steel Canada), and Canada became a net importer of steel, importing 8.4 Mt and exporting 6.6 Mt in 2023.

Why 1977 Was the Peak

• Demand Surge: The 1970s saw peak demand for steel in Canada due to infrastructure projects, automotive growth, and exports to the U.S., which was still a major steel consumer before its own decline.

• Global Competition: The late 1970s marked the beginning of increased competition from low-cost producers (e.g., China, South Korea), which eroded Canada’s market share in subsequent decades.

• Economic Shifts: The global recession of the early 1980s, coupled with rising energy costs and trade frictions, reduced Canada’s output. By the 2000s, global overcapacity and dumping (e.g., 552,535 tonnes of Chinese steel dumped in Canada in 2014) further weakened the industry.

Canada’s Position Compared to Today

• In 2023, global steel production was ~1.9 billion Mt, with China dominating at 54% (~1,019 Mt), followed by India (~140 Mt) and Japan (~87 Mt). Canada’s 12.8 Mt in 2023 is a fraction of these leaders, and its global rank has slipped to ~17th.

  At its 1977 peak, Canada’s 15.9 Mt represented a higher share of global production (~2–3% vs. ~0.7% in 2023), reflecting its stronger relative position during the postwar industrial era.

Conclusion

Canada’s steel manufacturing peaked in 1977 at 15.9 million metric tons, ranking it roughly 10th–12th globally among steel-producing countries. This was a high point driven by postwar demand, technological advancements, and strong U.S. export markets. Compared to giants like the USSR (~150 Mt), USA (~110–120 Mt), and Japan (~100 Mt), Canada was a mid-tier producer, but its output was significant for its economic size. Since then, global competition, particularly from China, and economic shifts have reduced Canada’s production and global standing, with 2023 output at 12.8 Mt and a rank of ~17.