The steel industry is an $800 billion sector whose products take a multitude of shapes and qualities. Steel is a ubiquitous material fundamental to all manufacturing and construction activities. Two thirds of steel is produced using virgin iron ore and entails an intermediate product called “pig iron”. The iron ore is mined largely separately from the location of iron and steel production which tends to be near markets.

The remaining one third of steel is almost all produced by the recycling of scrap metal. For an overview of recent steel production statistics see World Steel Association (WSA).


Iron ore occurs throughout the world and small and medium sized mines service domestic mills around the world. Of the internationally traded iron ore, Brazil and Australia dominate and together account for 70 % of the seaborne trade.

Iron ores are mostly oxides of iron in which the iron content is typically between 30% and 67%. The lesser grades are beneficiated at the mine before shipping to the mills. The mines are invariably large open pits. Due to the value of the ore relative to the cost of its transport, efficient handling and logistics facilities are essential.

Metal Production

The conversion of iron oxide to metal is undertaken in blast furnaces. These are large capital intensive operations in which, typically, a tonne of steel is produced by the reduction 1.6 tonnes of iron ore reduced by reaction with 800kg of coke in furnaces with capacities of up to 4 million tonnes per annum. The process is very efficient with yields up to 98%. The molten metal is tapped from the base of the furnace. However iron typically contains between 2.5% and 4% carbon. This carbon makes the iron brittle and severely limits its uses. It is described as “pig iron”.

The pig iron is transferred to a second smaller furnace, normally a basic oxygen furnace, where the carbon is burnt off by injection of air. Alloying elements may also be added at this stage in order to enable the correct chemistry of the final steel to be obtained.

In recent years China, has emerged as the fastest growing steel producer and now represents over 35% of world capacity. India is forecast to be the next centre of growth.

The recycling of steel scrap has become an increasingly important part of the steel industry and it now accounts for about one third of all steel production. Scrap is remelted in electric arc furnaces, this is more fully described under the Recycling section of this website.

Scrap Iron and Steel


Over the past 25 years there has been significant growth in gas based iron reduction in shaft furnaces and this method now accounts for about 5% of global production. The shaft furnace iron ore is heated and reduced by gas, but the charge is maintained in a solid form that then forms Direct Reduced Iron (DRI) or is briquetted to make Hot Briquetted Iron (HBI), for merchant sales. DRI contains about 90 to 95% iron and is therefore a useful substitute for scrap in electric arc furnaces. Pig iron may also be used as a scrap substitute in electric arc furnaces.

US steel works


Due to the broad range of steel qualities and highly specialised demands of some customers, mills often make steel specifically for a particular customer which is sold on contract to those users. Most steel however is made in standard grades for ‘spot’ or non-contract sales.

Broadly speaking, steel falls into two main categories, flat and long products. A significant proportion of flat products require high quality steel in order to create sheets that have a near perfect finish and which are therefore able to be used in high quality products, e.g. cars. Long products are commonly produced from scrap, were the impurities (which are not present in primary ores) result in steel qualities that tend to be used in the lower value reinforcing or merchant bar markets.

Scrap, pig iron and HBI are sold on an open international market.


Steel is used throughout the world in almost every aspect of our lives.

Steel is commonly used outdoors where it is subject to corrosion by oxidation, especially in wet or damp conditions. In order to protect steel from corrosion it may be painted, but over the last 30 years galvanising, sometimes followed by painting, has become the most important way of protecting steel and therefore prolonging the life of the object.

Galvanising is the coating of the steel surface in zinc metal. The zinc forms an impervious layer on the steel. It is generally bonded onto the surface by forming an alloy with iron that grades from pure zinc at the surface through to the pure steel in the substrate.