Case 4: The consolidating steel industry
For a long time, the steel industry was seen as a static and unprofitable one. Producers were
nationally based, often state owned and frequently unprofitable
between the late 1990s and
2003, more than 50 independent steel producers went into bankruptcy in the USA. The twenty-
first century has seen a revolution. For example, during 2006, Mittal Steel paid $35bn (£19.6bn;
A28bn) to buy European steel giant Arcelor, creating the world’s largest steel company.
following year, Indian conglomerate Tata bought Anglo-Dutch steel company Corus for $13bn.
These high prices indicated considerable confidence in being able to turn the industry round.
In the last 10 years, two powerful groups have entered world steel markets. First, after a period
of privatization and reorganisation, large Russian producers such as Severstal and Evraz
entered export markets, exporting 30 million tonnes of steel by 2005. At the same time, Chinese