Report highlights

A key indicator of the potential for growth in steel demand is per capita consumption. While the per capita consumption in industrialising countries is increasing, it generally lags behind that of the major industrial economies. India, in particular, has enormous latent steel demand. A limiting factor in steel demand is the growing competition from alternative materials in some markets, such as automobiles, where the use of aluminium is increasing. The level of substitution would, however, need to be many times greater than it is now to have a significant impact on overall steel demand.

The structure of the manganese mining industry continues to change, with ownership of production capacity increasingly concentrated. As of 2007, BHP Billiton controlled approximately 17% of global supply, with Privat, Eramet, Vale (formerly CVRD) and Assmang bringing the total up to about 50%. Privat has been highly acquisitive in recent years and now controls all mine production in Ukraine, in addition to owning mines in Georgia and Ghana. In late 2007 it won the battle to acquire the Australian producer ConsMin. Privat, like the other major mine producers, is vertically integrated into the production of manganese ferro-alloys and output from its mines is probably destined mainly for captive use. This has implications for the global supply-demand balance.

This growing concentration of ownership and vertical integration is extending into the steelmaking sector, where, not that long ago, many producers moved out of backward integration. The prime example of this is ArcelorMittal, the world's largest steelmaker, which intends to become largely self-sufficient in raw materials. It is a partner in the Kalgadi project in South Africa, which will be one of the world's leading manganese ore and Fe-Mn producers when it comes on stream in 2010, and in late 2007 it announced the acquisition of the Slovak Fe-Mn smelter OFZ.