Many global steel companies are under stress with the present price crisis. To bail themselves out from the impending crisis, steel producers around the world are moving towards consolidation. Can this save the industry or is there any other viable alternative?

The world’s largest capital-intensive industry - steelis presently passing through a phase of consolidation. Traditionally while all other sectors across the globe were consolidating, the steel industry remained immune to this activity. However, very recently, this notion proved to be wrong. France’s Usinor fired the shot. Recently the company has announced the largest ever merger plan in steel involving Usinor, Luxembourg based Arbed and the Spanish Aceralia. Globally, the steel industry is passing through a rough weather. It is more similar to the global steel crisis of 1974; one thing that is perhaps missing is the active intervention of the governments in funding the companies. Although demand has been steadily increasing, the prices of steel are still hovering around 20 year lows. Major companies are either consolidating among themselves or entering strategic tie-ups to bail themselves out of the crisis. Even the B2B steel exchanges are consolidating to survive. Is the present wave of consolidation among steel players to survive or cut competition? Slack Y2K There was no real hint that 2000 would turn out to be so bad for the steel industry. After the recovery of the industry from the Asian crisis, it got carried away with demand-side miscalculations.

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