The history of the modern steel industry began in the late 1850s,
but since then, steel has
been basic to the world's industrial economy. This article is intended only to
address the business, economic and social dimensions of the industry, since the
bulk production of steel began as a result of Henry Bessemer's development
of the Bessemer converter in 1857.
Previously steel was very expensive to produce and only used in small expensive
items such as knives, swords and armor.
Steel is an alloy composed of between
0.2% and 2.0% carbon, and the balance of iron. From prehistory through the
creation of the blast furnace, iron was
produced from iron ore as wrought iron, 99.82% - 100% Fe, and the
process of making steel involved adding carbon
to the iron, usually via serendipity in the forge or via the cementation process. The introduction
of the blast furnace reversed the problem. A blast furnace produces pig
iron, which is an alloy of approximately 90% iron and 10% carbon. If the
process of steelmaking begins with pig iron instead of wrought
iron, the challenge is to remove a
sufficient amount of carbon to get it to the 0.2 to 2 percent for steel.
Before about 1860 steel was an
expensive product, made in small quantities and used mostly for swords, tools
and cutlery; all large metal structures were made of wrought or cast
iron. Steelmaking was centered in Sheffield,
Britain, which supplied the European and the American markets. The introduction
of cheap steel was due to the Bessemer and the open hearth processes, two
technological advances made in England. In the Bessemer process, molten
pig iron is converted to steel by blowing air through it after it was removed
from the furnace. The air blast burned the carbon and silicon out of the pig
iron, releasing heat and causing the temperature of the molten metal to
rise.
Henry Bessemer demonstrated
the process in 1856 and had a successful operation going by 1864. By 1870
Bessemer steel was widely used for ship plate. By the 1850s, the speed, weight,
and quantity of railway traffic was limited by the strength of the wrought iron
rails in use. The solution was to turn to steel rails, which the Bessemer
process made competitive in price. Experience quickly proved steel had much
greater strength and durability and could handle the increasingly heavy and
faster engines and cars.
After 1890 the Bessemer process was
gradually supplanted by open-hearth steelmaking and by the
middle of the 20th century was no longer in use. The open-hearth process
originated in the 1860s in Germany and France. The usual open-hearth process
used pig iron, ore, and scrap, and became known as the Siemens-Martin process.
Its process allowed closer control over the composition of the steel; also, a
substantial quantity of scrap could be included in the charge. The crucible
process remained important for making high-quality alloy steel into the 20th
century. By 1900 the electric arc furnace was adapted
to steelmaking and by the 1920s, the falling cost of electricity allowed it to
largely supplant the crucible process for specialty steels.
Britain led the world's Industrial Revolution with its
early commitment to coal mining, steam power, textile mills, machinery,
railways, and shipbuilding. Britain's demand for iron and steel, combined with
ample capital and energetic entrepreneurs, made it the world leader in the
first half of the 19th century.
In 1875, Britain accounted for 47% of
world production of pig iron and almost 40% of steel. 40% of British output was
exported to the U.S., which was rapidly building its rail and industrial
infrastructure. Two decades later in 1896, however, the British share of world
production had plunged to 29% for pig iron and 22.5% for steel, and little was
sent to the U.S.
The U.S. was now the world leader and
Germany was catching up to Britain. Britain had lost its American market, and
was losing its role elsewhere; indeed American products were now underselling
British steel in Britain.
The growth of pig iron output was
dramatic. Britain went from 1.3 million tons in 1840 to 6.7 million in 1870 and
10.4 in 1913. The US started from a lower base, but grew faster; from 0.3
million tons in 1840, to 1.7 million in 1870, and 31.5 million in 1913. Germany
went from 0.2 million tons in 1859 to 1.6 in 1871 and 19.3 in 1913. France,
Belgium, Austria-Hungary, and Russia, combined, went from 2.2 million tons in
1870 to 14.1 million tons in 1913, on the eve of the World War. During the war
the demand for artillery shells and other supplies caused a spurt in output and
a diversion to military uses.
Abé (1996) explores the record of iron
and steel firms in Victorian England by analyzing Bolckow Vaughan &
Company. It was wedded for too long to obsolescent technology and was a very
late adopter of the open hearth furnace method. Abé concludes that the firm—and
the British steel industry, suffered from a failure of entrepreneurship and
planning.
Blair (1997) explores the history of
the British Steel industry since the Second World War to evaluate the impact of
government intervention in a market economy.
Entrepreneurship was lacking in the
1940s; the government could not persuade the industry to upgrade its plants.
For generations the industry had followed a patchwork growth pattern which
proved inefficient in the face of world competition. In 1946 the first steel
development plan was put into practice with the aim of increasing capacity; the
"Iron and Steel Act of 1949" meant nationalization of the industry.
However, the reforms were dismantled
by the Conservative governments in the 1950s. In 1967, under Labor Party
control again, the industry was again nationalized. But by then twenty years of
political manipulation had left companies such as British Steel with serious
problems: a complacency with existing equipment, plants operating under
capacity (low efficiency), poor quality assets, outdated technology, government
price controls, higher coal and oil costs, lack of funds for capital
improvement, and increasing world market competition. By the 1970s the Labor
government had its main goal to keep employment high in the declining industry.
Since British Steel was a main employer in depressed regions, it had kept many
mills and facilities that were operating at a loss. In the 1980s, Conservative
Prime Minister Margaret Thatcher re-privatized
BSC as British Steel.
In Australia, the Minister for Public
Works, Arthur Hill Griffith, had consistently
advocated for the greater industrialization of Newcastle, then, under William Holman,
personally negotiated the establishment of a steelworks with G. D. Delprat of
the Broken Hill Proprietary Co. Ltd. Griffith was also
the architect of the Walsh Island establishment.
In 1915, Broken Hill
Proprietary Company ventured into steel manufacturing with its
operation in Newcastle, which was closed in 1999. The 'long products' side
of the steel business was spun off to form OneSteel in
2000. BHP's decision to move from mining ore to open a steelworks at
Newcastle was precipitated by the technical limitations in recovering value
from mining the 'lower-lying sulphide ores'. The discovery of Iron Knob and Iron Monarch near the
western shore of the Spencer Gulfin South
Australia combined with the development by the BHP metallurgist, A. D.
Carmichael, of a technique for 'separating zinc sulphides from the accompanying
earth and rock' led BHP 'to implement the startlingly simple and cheap process
for liberating vast amounts of valuable metals out of sulphide ores, including
huge heaps of tailings and slimes up to' 40 ft (12 m) high.
The Ruhr Valley provided
an excellent location for the German iron and steel industry because of the
availability of raw materials, coal, transport, a skilled labor force, nearby
markets, and an entrepreneurial spirit that led to the creation of many firms,
often in close conjunction with coal mines. By 1850 the Ruhr had 50 iron works
with 2,813 full-time employees. The first modern furnace was built in 1849. The
creation of the German Empire in
1870 gave further impetus to rapid growth, as Germany started to catch up with
Britain. From 1880 to World War I, the industry of the Ruhr area consisted of
numerous enterprises, each working on a separate level of production. Mixed
enterprises could unite all levels of production through vertical integration,
thus lowering production costs. Technological progress brought new advantages
as well. These developments set the stage for the creation of combined business
concerns.
The leading firm was Friedrich Krupp AG run by the
Krupp family. Many diverse, large-scale family firms such as Krupp's
reorganized in order to adapt to the changing conditions and meet the economic
depression of the 1870s, which reduced the earnings in the German iron and
steel industry. Krupp reformed his accounting system to better manage his
growing empire, adding a specialized bureau of calculation as well as a bureau
for the control of times and wages. The rival firm GHHquickly followed, as
did Thyssen
AG, which had been founded by August Thyssen in
1867. Germany became Europe's leading steel-producing nation in the late 19th
century, thanks in large part to the protection from American and British
competition afforded by tariffs and cartels.
By 1913 American and German exports
dominated the world steel market, and Britain slipped to third
place. German steel production grew explosively from 1 million metric tons
in 1885 to 10 million in 1905 and peaked at 19 million in 1918. In the 1920s
Germany produced about 15 million tons, but output plunged to 6 million in
1933. Under the Nazis, steel output peaked at 22 million tons in 1940, then
dipped to 18 million in 1944 under Allied bombing. The merger of four
major firms into the German Steel Trust (Vereinigte
Stahlwerke) in 1926 was modeled on the U.S. Steel corporation
in the U.S. The goal was to move beyond the limitations of the old cartel
system by incorporating advances simultaneously inside a single corporation.
The new company emphasized rationalization of management structures and
modernization of the technology; it employed a multi-divisional structure and
used return on investment as its measure of success. It represented the
"Americanization" of the German steel industry because its internal
structure, management methods, use of technology, and emphasis on mass
production. The chief difference was that consumer capitalism as an
industrial strategy did not seem plausible to German steel industrialists.
In iron and steel and other
industries, German firms avoided cut-throat competition and instead relied on
trade associations. Germany was a world leader because of its prevailing
"corporatist mentality", its strong bureaucratic tradition, and the
encouragement of the government. These associations regulated competition and
allowed small firms to function in the shadow of much larger companies.
With the need to rebuild the
bombed-out infrastructure after the Second World War, Marshall Plan (1948–51)
enabled West Germany to rebuild and modernize its mills. It produced 3 million
of steel in 1947, 12 million in 1950, 34 million in 1960 and 46 million in
1970. East Germany produced about a 10th as much.
The French iron industry lagged behind
the United Kingdom and Belgium in the early 19th century, and after 1850 also
lagged behind Germany and Luxembourg. Its industry comprised too many small, inefficient
firms.[24] 20th
century growth was not robust, due more to traditional social and economic
attitudes than to inherent geographic, population, or resource factors. Despite
a high national income level, the French steel industry remained
laggard. The industry was based on large supplies of coal and iron ore,
and was dispersed across the country. The greatest output came in 1929, at 10.4
million metric tons. The industry suffered sharply during the Great
Depression and the World War II. Prosperity returned by mid-1950s, but profits
came largely from strong domestic demand rather than competitive capacity. Late
modernization delayed the development of powerful unions and collective
bargaining.
Stassano furnace exhibited at
the Museo
della Scienza e della Tecnologia "Leonardo da Vinci", Milan
In Italy a shortage of coal led the
steel industry to specialize in the use of hydro-electrical energy, exploiting
ideas pioneered by Ernesto Stassano from 1898 (Stassano
furnace). Despite periods of innovation (1907–14), growth (1915–18),
and consolidation (1918–22), early expectations were only partly realized.
Steel output in the 1920s and 1930s averaged about 2.1 million metric tons. Per
capita consumption was much lower than the average of Western Europe. Electrical
processes were an important substitute, yet did not improve competitiveness or
reduce prices. Instead, they reinforced the dualism of the sector and initiated
a vicious circle that prevented market expansion. Italy
modernized its industry in the 1950s and 1960s and it grew rapidly, becoming
second only to West Germany in the 1970s. Strong labour unions kept employment
levels high. Troubles multiplied after 1980, however, as foreign competition
became stiffer. In 1980 the largest producer Nuova Italsider lost 746
billion lira in its inefficient operations. In the 1990s the Italian steel
industry, then mostly state-owned, was largely privatised. Today the country
is the world's seventh-largest steel exporter.
Bethlehem Steel in Bethlehem, Pennsylvania was the #2 American producer but after 1970 ignored new technology
and imports; it went bankrupt in 2001.
From 1875 to 1920 American steel
production grew from 380,000 tons to 60 million tons annually, making the U.S.
the world leader. The annual growth rates in steel 1870–1913 were 7.0% for the
US; 1.0% for Britain; 6.0% for Germany; and 4.3% for France, Belgium and
Russia, the other major producers. This explosive American growth rested
on solid technological foundations, assisted by the protective tariff and the
continuous rapid expansion of urban infrastructures, office buildings,
factories, railroads, bridges and other sectors that increasingly demanded
steel. The use of steel in automobiles and household appliances came in the
20th century.
Some key elements in the growth of
steel production included the easy availability of iron ore, coal, and
underpaid labor. Iron ore of fair quality was abundant in the eastern states,
but the Lake Superior region contained huge deposits of exceedingly rich ore;
the Marquette Iron Range was
discovered in 1844; operations began in 1846. Other ranges were opened by 1910,
including the Menominee, Gogebic, Vermilion, Cuyuna, and, greatest of all, (in
1892) the Mesabi range in Minnesota. This iron ore was shipped through the
Lakes to ports such as Chicago, Detroit, Cleveland, Erie and Buffalo for
shipment by rail to the steel mills. Abundant coal was available in
Pennsylvania and Ohio. Manpower was short. Few native Americans wanted to work
in the mills, but immigrants from Britain and Germany (and later from Eastern
Europe) arrived in great numbers. A range of industries came to be
dependent on convict leasing for cheap, dependable labor.
"In Alabama, industrialization
was generating a ravenous appetite for the state’s coal and iron ore.
Production was booming, and unions were attempting to organize free miners.
Convicts provided an ideal captive work force: cheap, usually docile, unable to
organize and available when free laborers went on strike."
The Southern agrarian economy did not
accommodate convict leasing as well as the industrial economy did, whose jobs
were often unappealing or dangerous, offering hard-labor and low pay. The
competition, expansion, and growth of mining and steel companies also created a
high demand for labor, but union labor posed a threat to expanding companies.
As unions bargained for higher wages and better conditions, often organizing strikes
in order to achieve their goals, the growing companies would be forced to agree
to union demands or face abrupt halts in production. The rate companies paid
for convict leases, which paid the laborer nothing, was regulated by government
and state officials who entered the labor contracts with companies. "The
companies built their own prisons, fed and clothed the convicts, and supplied
guards as they saw fit." (Blackmon 2001) Alabama's use of convict leasing was
commanding; 51 of its 67 counties regularly leased convicts serving for
misdemeanors at a rate of about $5-20 per month, equal to about $160-500 in
2015. Although the influence of labor unions forced some states to move
away from the profitable convict lease agreements and run traditional prisons,
plenty of companies began substituting convict labor in their operations in the
twentieth century. "The biggest user of forced labor in Alabama at the
turn of the century was Tennessee Coal, Iron
& Railroad Co., [of] U.S. Steel"
In 1869 iron was already a major
industry, accounting for 6.6% of manufacturing employment and 7.8% of
manufacturing output. By then the central figure was Andrew Carnegie, who
made Pittsburgh the center of the industry. He sold his operations
to US Steel in
1901, which became the world's largest steel corporation for decades.
In the 1880s, the transition
from wrought iron puddling to
mass-produced Bessemer steel greatly increased worker productivity.
Highly skilled workers remained
essential, but the average level of skill declined. Nevertheless, steelworkers
earned much more than ironworkers despite their fewer skills. Workers in an
integrated, synchronized mass production environment wielded greater strategic
power, for the greater cost of mistakes bolstered workers' status. The
experience demonstrated that the new technology did not decrease worker
bargaining leverage by creating an interchangeable, unskilled workforce.
Carnegie's great innovation was in the
cheap and efficient mass production of steel rails for railroad lines. This
could not have happened without the prior invention of Bessemer Steel. Thus
Carnegie's "innovation" was scale, not anything technical.
In the late 1880s, The Carnegie Steel
was the largest manufacturer of pig iron, steel
rails, and coke in the world, with a capacity to produce
approximately 2,000 tons of pig iron per day. In 1888, he bought the
rival Homestead Steel Works, which included an
extensive plant served by tributary coal and iron fields, a 425-mile
(685 km) long railway, and a line of lake steamships. A
consolidation of Carnegie's assets and those of his associates occurred in 1892
with the launching of the Carnegie Steel Company.
Around that time, he asked his
cousin, George Lauder to join him
in America from Scotland. Lauder was a leading mechanical engineer who had
studied under Lord Kelvin. Lauder devised several new systems
for the Carnegie Steel Company including the
process for washing and coking dross from coal mines, which resulted in a
significant increase in scale, profits, and enterprise value.
Lauder would go on to lead the
development of the use of steel in armor and armaments for the Carnegie Steel Company, spending
significant time at the Krupp factory
in Germany in 1886 before returning to build the massive armor plate mill at
the Homestead Steel Works that would
revolutionize warfare forever.
By 1889, the U.S. output of steel
exceeded that of Britain, and Andrew Carnegie owned a large part of it. By
1900, the profits of Carnegie Bros. & Company alone stood at $480,000,000
with $225,000,000 being Carnegie's share. Carnegie's empire grew to include
the J. Edgar Thomson Steel Works (named
for John Edgar Thomson, Carnegie's former
boss and president of the Pennsylvania Railroad), Pittsburgh
Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill
(Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel
Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through
Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project
across the Mississippi River in St. Louis, Missouri (completed 1874). This
project was an important proof-of-concept for steel technology which marked the
opening of a new steel market.
The Homestead Strike was a
violent labor dispute in 1892 that ended in a battle between strikers and
private security guards. The dispute took place at Carnegie's Homestead Steel Works between
the Amalgamated
Association of Iron and Steel Workers and the Carnegie Steel Company.
The final result was a major defeat for the union and a setback for efforts to
unionize steelworkers. Carnegie sold all his steel holdings
in 1901; they were merged into U.S. Steel and it was non-union until the late
1930s.
By 1900 the US was the largest
producer and also the lowest cost producer, and demand for steel seemed
inexhaustible. Output had tripled since 1890, but customers, not producers,
mostly benefitted. Productivity-enhancing technology encouraged faster and
faster rates of investment in new plants. However, during recessions, demand
fell sharply taking down output, prices, and profits. Charles M. Schwab of Carnegie Steel proposed
a solution: consolidation. Financier J. P. Morgan arranged
the buyout of Carnegie and most other major forms, and put Elbert Gary in
charge.
US Steel combined finishing firms
(American Tin Plate (controlled by William Henry "Judge" Moore), American
Steel and Wire, and National Tube) with two major integrated companies,
Carnegie Steel and Federal Steel. It was capitalized at $1.466 billion, and
included 213 manufacturing mills, one thousand miles of railroad, and 41 mines.
In 1901, it accounted for 66% of America's steel output, and almost 30% of the
world's. During World War I, its annual production exceeded the combined output
of all German and Austrian firms.
The Steel Strike of 1919 disrupted the
entire industry for months, but the union lost and its membership sharply
declined. Rapid
growth of cities made the 1920s boom years. President Harding and social
reformers forced it to end the 12-hour day in 1923.
Charles M. Schwab (1862–1939)
and Eugene Grace (1876–1960) made Bethlehem Steel
the second-largest American steel company by the 1920s. Schwab had been the
operating head of Carnegie Steel and US Steel. In 1903 he purchased the small
firm Bethlehem Steel, and in 1916 made Grace President.
Innovation was the keynote at a time when U.S. Steel under Judge Gary moved
slowly. Bethlehem concentrated on government contracts, such as ships and naval
armor, and on construction beams, especially for skyscrapers and bridges.
Its subsidiary Bethlehem Shipbuilding Corporation operated
15 shipyards in World War II. It produced 1,121 ships, more than any other
builder during the war and nearly one-fifth of the U.S. Navy's fleet. Its peak
employment was 180,000 workers, out of a company-wide wartime peak of 300,000.
After 1945 Bethlehem doubled its steel capacity, a measure of the widespread
optimism in the industry. However the company ignored the new technologies then
being developed in Europe and Japan. Seeking labor peace in order to avoid
strikes, Bethlehem like the other majors agreed to large wage and benefits
increases that kept its costs high. After Grace retired the inbred executives
concentrated on short term profits and postponed innovations that led to
long-term inefficiency. It went bankrupt in 2001.
Cyrus Eaton (1883–1979)
in 1925 purchased the small Trumbull Steel Company of Warren, Ohio, for $18
million. In the late 1920s he purchased undervalued steel and rubber companies.
In 1930, Eaton consolidated his steel holdings into the Republic Steel, based in
Cleveland; it became the third-largest steel producer in the U.S., after US
Steel and Bethlehem Steel.
The American Federation of Labor (AFL) tried
and failed to organize the steelworkers in 1919. Although the strike gained
widespread middle-class support because of its demand and the 12-hour day, the
strike failed and unionization was postponed until the late 1930s. The Mills
ended the 12-hour day in the early 1920s.
The second surge of unionization came
under the auspices of the militant CIO in the late
1930s, when it set up the Steel Workers Organizing Committee. The SWOC
focused almost exclusively on the achievement of a signed contract, with
"Little Steel" (the major producers except for US Steel). At the
grassroots however, women of the steel auxiliaries, workers on the picket line,
and middle-class liberals from across Chicago sought to transform the strike
into something larger than a showdown over union recognition .In Chicago,
the Little Steel Strike raised the
possibility that steelworkers might embrace the ‘civic unionism’ that animated
the left-led unions of the era. The effort failed, and while the strike was
won, the resulting powerful United Steelworkers of America union
suppressed grassroots opinions.
Integration was the watchword as the
various processes were brought together by large corporations, from mining the
iron ore to shipping the finished product to wholesalers. The typical
steelworks was a giant operation, including blast furnaces, Bessemer converters,
open-hearth furnaces, rolling mills, coke ovens and foundries, as well as
supported transportation facilities. The largest ones were operated in the
region from Chicago to St. Louis to Baltimore, Philadelphia and Buffalo.
Smaller operations appeared in Birmingham, Alabama, and in California.
The industry grew slowly but other
industries grew even faster, so that by 1967, as the downward spiral began,
steel accounted for 4.4% of manufacturing employment and 4.9% of manufacturing
output. After 1970 American steel
producers could no longer compete effectively with low-wage
producers elsewhere. Imports and local mini-mills undercut sales.
Per-capita steel consumption in the
U.S. peaked in 1977, then fell by half before staging a modest recovery to
levels well below the peak.
Most mills were closed. Bethlehem went
bankrupt in 2001. In 1984, Republic merged with Jones and Laughlin Steel Company; the new firm went
bankrupt in 2001. US Steel diversified into oil (Marathon Oil was
spun off in 2001). Finally US Steel reemerged in 2002 with plants in three
American locations (plus one in Europe) that employed fewer than one-tenth the
168,000 workers of 1902. By 2001 steel accounted for only 0.8% of manufacturing
employment and 0.8% of manufacturing output.
The world steel industry peaked in
2007. That year, ThyssenKrupp spent $12 billion to build the two most modern
mills in the world, in Alabama and Brazil. The worldwide great recession
starting in 2008, however, with its heavy cutbacks in construction, sharply
lowered demand and prices fell 40%. ThyssenKrupp lost $11 billion on its two
new plants, which sold steel below the cost of production. Finally in 2013,
ThyssenKrupp offered the plants for sale at under $4 billion.
The President of the United States is
authorized to declare each May "Steelmark Month" to recognize the
contribution made by the steel industry to the United States.
Yonekura shows the steel industry was
central to the economic development of Japan. The nation's sudden
transformation from feudal to
modern society in the late nineteenth century, its heavy industrialization and
imperialist war ventures in 1900–1945, and the post-World War II high-economic growth,
all depended on iron and steel. The other great Japanese industries, such as
shipbuilding,
automobiles, and industrial machinery
are closely linked to steel. From 1850 to 1970, the industry increased its
crude steel production from virtually nothing to 93.3 million tons (the third
largest in the world).
The government's activist Ministry of
International Trade and Industry (MITI) played a major role in
coordination. The transfer of technology from the West and the establishment of
competitive firms involved far more than buying foreign hardware. MITI located
steel mills and organized a domestic market; it sponsored Yawata Steel Company.
Japanese engineers and entrepreneurs internally developed the necessary
technological and organizational capabilities, planned the transfer and
adoption of technology, and gauged demand and sources of raw materials and
finances.
Tata Iron and Steel Company (TISCO)
was established by Dorabji Tata in 1907, as
part of his father's conglomerate. By 1939 it operated the largest steel plant
in the British Empire. The company launched a major modernization and expansion
program in 1951.
Prime Minister Jawaharlal Nehru, a
believer in socialism, decided that the technological revolution in India
needed maximization of steel production. He, therefore, formed a government
owned company, Hindustan Steel Limited (HSL) and set
up three steel plants in the 1950s.
The Indian steel industry began
expanding into Europe in the 21st century. In January 2007 India's Tata Steel
made a successful $11.3 billion offer to buy European steel maker Corus Group. In
2006 Mittal Steel (based in London but with Indian
management) merged with Arcelor after a takeover bid for $34.3 billion to
become the world's biggest steel maker, ArcelorMittal (based
in Luxembourg City), with 10% of the world's output.
Communist party dictator Mao Zedong disdained
the cities and put his faith in the Chinese peasantry for a Great Leap Forward. Mao saw steel
production as the key to overnight economic modernization, promising that
within 15 years China's steel production would surpass that of Britain. In 1958
he decided that steel production would double within the year, using backyard
steel furnaces run by inexperienced peasants. The plan was a fiasco, as the
small amounts of steel produced were of very poor quality, and the diversion of
resources out of agriculture produced a massive famine in 1959–61 that killed
millions.
With economic reforms brought in
by Deng Xiaoping, who led China from 1978 to 1992,
China began to develop a modern steel industry by building new steel plants and
recycling scrap metal from the United States and Europe. As of 2013 China
produced 779 million metric tons of steel each year, making it by far the
largest steel producing country in the world. This is compared to 165 for the
European Union, 110 for Japan, 87 for the United States and 81 for India. China's
2013 steel production was equivalent to an average of 3.14 cubic meters of
steel per second.
Norb Leahy, Dunwoody GA Tea Party Leader
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