Archive:Iron and steel production and processing statistics - NACE Rev. 1.1
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- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article belongs to a set of statistical articles which analyse the structure, development and characteristics of the various economic activities in the European Union (EU). The present article covers iron and steel production and processing, corresponding to NACE Rev 1.1 Groups 27.1 to 27.3, which is part of the metals and metal products sector. The activities covered in this article are collectively referred to as the first processing of ferrous metals, and consist of:
- the manufacture of basic iron and steel and ferro-alloys (corresponding to NACE Group 27.1);
- the manufacture of tubes, both iron or steel (NACE Group 27.2);
- other first processing activities associated with iron and steel (NACE Group 27.3), which includes drawing, rolling, forming and wire drawing.
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Main statistical findings
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The first processing of ferrous metals sector is one that requires very large investments in technology and equipment. Due to these significant capital requirements, large enterprises (groups) tend to dominate the market. Global consolidation and restructuring has intensified in recent years. Within the European Union, enterprise groups have moved from a national base to a Europe-wide base and more recently have reinforced their global nature through acquisitions outside Europe, or have themselves been acquired by companies of non-European background (such as the takeover of Estonia’s Galvex by ArcelorMittal in March 2008). The merger of Mittal Steel and Arcelor in 2006 created the world’s largest steel producing enterprise group; in 2007 it produced 116.4 million tonnes of crude steel output, over three times the output of the second largest enterprise group, Nippon Steel. After the buy-out of the Corus Group in 2007, Tata steel became the sixth largest global steel producing enterprise group.
Structural profile
There were 6.7 thousand enterprises throughout the EU-27 for whom the first processing of ferrous metals (NACE Groups 27.1 to 27.3) was their main activity in 2006. This corresponded to only 1.6 % of all enterprises in the metals and metal products manufacturing (NACE Subsection DJ) sector. The first processing of ferrous metals sector was much larger, however, in terms of employment and value added. It employed 612.6 thousand persons in the Member States, corresponding to a little less than one in every eight (12.1 %) of the metals and metal products manufacturing workforce. From a turnover of EUR 237.1 billion in 2006, the sector generated EUR 49.6 billion of added value, just over one fifth (20.3 %) of the total value added of metals and metals products manufacturing in the EU-27.
By far the largest of the three NACE group activities covered by the first processing of ferrous metals sector was the manufacture of basic iron and steel (NACE Group 27.1); it accounted for just under three quarters (72.6 %) of value added and two thirds (66.9 %) of employment in 2006. The next largest activity was the manufacture of tubes (NACE Group 27.2), which generated a little less than one fifth (18.2 %) of sectoral value added and accounted for about one in every five persons employed (21.2 %). The smallest activity was other first processing of iron and steel (NACE Group 27.3).
About one quarter (24.8 %) of the value added generated by the first processing of ferrous metals sector across the EU-27 came from Germany, the next largest contributions coming from Italy (14.4 %) and France (10.0 %). However, it was Slovakia that was by far the most specialised Member State in the first processing of ferrous metals sector; this activity contributing 5.3 % to non-financial business economy value added in 2006, which was just over six times the EU-27 average (0.9 %). In these terms, the Czech Republic, Finland, Belgium, Austria and Romania (2005) were also relatively specialised in this activity - as each of these countries reported that the first processing of ferrous metals sector contributed between 1.8 % and 2.0 % of the value added in their respective non-financial business economies.
The production indices of all three of the NACE group activities within the first processing of ferrous metals fluctuated more than the overall index for metals and metal products manufacturing during the period between 1997 and 2007. This was particularly the case regarding the manufacture of tubes and the other first processing of iron and steel activities. Without strong upswings in 2006 and 2007, the production indices of both these activities would have been below 1997 levels and well below their respective peaks (1998 for tubes and 2000 for the other first processing of iron and steel activities). However, the rises in output at the end of this ten-year period pushed the production indices for the EU-27 above 1997 levels; on average, the output of tubes manufacturing rose by 1.1 % per year between 1997 and 2007 and that of the other first processing of iron and steel activities by 0.8 % per year. The upward trend in the production index for the manufacture of basic iron and steel was clearer, particularly from a relative trough in 1999, despite cutbacks in 2001 and 2005. Over the ten years through to 2007, basic iron and steel output in the EU-27 increased by an average 1.0 % per year.
Expenditure and productivity
Tangible investment in the EU-27’s first processing of ferrous metals sector was EUR 25.2 billion in 2006, representing about over one quarter (27.7 %) of all investment made in the metals and metal products manufacturing sector. This level of tangible investment corresponded to an investment rate of 18.6 %, which was significantly higher than the average rate (13.6 %) across metals and metal products manufacturing as a whole, and marginally above the average rate for the non-financial business economy.
Within the EU-27’s first processing of ferrous metals sector a much higher proportion of operating expenditure went on the purchase of goods and services (88.5 %) than was the case (80.8 %) for metals and metal products manufacturing as a whole. Although the proportion of operating expenditure going on personnel costs in the first processing of ferrous metals sector was relatively low (11.5 %), average personnel costs of EUR 42.2 thousand per employee in 2006 were relatively high, being about EUR 10.0 thousand per employee more than the average across metals and metal products manufacturing.
Each person employed in the EU-27’s first processing of ferrous metals sector contributed added value of EUR 80.9 thousand in 2006, about two thirds more than the average across metals and metal products manufacturing. This relatively high level of apparent labour productivity was close to twice the level of average personnel costs. The resulting wage-adjusted labour productivity ratio of 191.5 % for the EU-27’s first processing of ferrous metals sector in 2006 was notably higher than the ratio (149.3 %) for the whole of the metals and metals products manufacturing sector. This characteristic was common to most of the Member States with the notable exceptions of Sweden, the United Kingdom and particularly Bulgaria, where the wage-adjusted labour productivity ratio was almost 100 percentage points lower than for metals and metal products manufacturing as a whole.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include short-term statistics (STS), and the World Steel Association (worldsteel) .
Context
The metals and metal products manufacturing sector is part of a diverse and interwoven economic network that incorporates upstream sectors and large downstream segments of manufacturing such as the transport equipment manufacturing and construction sectors. The challenges faced by the EU’s metals and metal products manufacturing sector therefore have direct and indirect consequences on many other parts of the economy. Looking ahead, a Communication (COM(2008) 108) from the European Commission to the Council and the European Parliament on the competitiveness of the metals industries was adopted in February 2008, and highlighted the challenges to be faced.
The EU-27 is largely dependent on imports of ore and concentrates for steel, ferro-alloys and non-ferrous metals production; it produces only 1.7 % of the world’s nickel, 2 % of its iron ore and 5 % of its copper (SEC(2007)771). Access to minerals and secondary raw materials at competitive prices is important, especially given the exhaustion of certain deposits in the EU-27 over time or their absence, and supply constraints that have been exacerbated by the strong growth in international demand from emerging economies such as China and India. This concern was part of a raw materials initiative of the European Commission (COM(2008) 699).
Parts of the metals and metal products manufacturing sector are highly energy-intensive. Energy costs for the EU-27’s metals and metal products manufacturing sector accounted for 4.4 % of purchases of goods and services in 2006, which was the third joint highest proportion among the industrial structural business statistics sectors, albeit well behind non-energy mining and quarrying (10.1 %) and other nonmetallic mineral products (9.5 %). Within this sector, however, energy costs in the casting of metals subsector accounted for 7.2 % of purchases of goods and services in 2006 and in the first processing of ferrous metals as much as 7.9 %. This level of energy consumption has important implications for energy and environmental (particularly climate change) policy.
The metals and metal products manufacturing sector is covered by a Directive on Integrated Pollution Prevention and Control (IPPC) and REACH. A proposal from the European Commission on the review of EU Emissions Trading Scheme (ETS) adopted in January 2008 (COM(2008) 30) foresees the inclusion of non-ferrous metals from 2013 onwards, along with some transitional measures to avoid ‘carbon leakage’.
See also
- Climate change statistics
- Construction statistics - NACE Rev. 2
- Industry and construction introduced
- Industry and construction statistics - short-term indicators
Further Eurostat information
Publications
- European Business: Facts and figures - 2009 edition
- The REACH baseline study - A tool to monitor the new EU policy on chemicals - Statistics in focus 48/2009
Main tables
Database
Dedicated section
Methodology/Metadata
- Iron and steel (ESMS metadata file - ste_esms)
Further information
- A contribution to the EU's Growth and Jobs Strategy - COM(2008) 108 final
- Analysis of the competitiveness of the non-energy extractive industry in the EU - SEC(2007) 771
- Europe's climate change opportunity - COM(2008) 30 final
- The raw materials initiative — meeting our critical needs for growth and jobs in Europe - COM(2008) 699 final