Asia Pacific Steel Sector Report

MarketLine Industry Profile
Steel in Asia-Pacific
October 2013
Reference Code: 0200-0998
Publication Date: October 2013
WWW.MARKETLINE.COM
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Asia-Pacific - Steel
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EXECUTIVE SUMMARY
Market value
The Asia-Pacific steel market shrank by 4% in 2012 to reach a value of $745,999.5 million.
Market value forecast

In 2017, the Asia-Pacific steel market is forecast to have a value of $1,071,230.2 million, an increase of 43.6% since
2012.
Market volume
The Asia-Pacific steel market grew by 3.7% in 2012 to reach a volume of 1,006,973.5 thousand tons.
Market volume forecast

In 2017, the Asia-Pacific steel market is forecast to have a volume of 1,311,831.7 thousand tons, an increase of 30.3%
since 2012.
Geography segmentation
China accounts for 71.2% of the Asia-Pacific steel market value.
Market rivalry
The steel industry is competitive and subject to cyclical swings, arising from factors, such as: excess capac ity, regional
demand and supply imbalances, volatile swings, in market demand and prices (more recently exacerbated by swings in
input prices), as well as the debt crisis in Euro zone.
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TABLE OF CONTENTS
Executive Summary..........................................................................................................................................................................2
Market value ..................................................................................................................................................................................2
Market value forecast...................................................................................................................................................................2
Market volume...............................................................................................................................................................................2
Market volume forecast ...............................................................................................................................................................2
Geography segmentation ............................................................................................................................................................2
Market ri valry .................................................................................................................................................................................2
Market Overview ...............................................................................................................................................................................7
Market definition............................................................................................................................................................................7
Market analysis .............................................................................................................................................................................7
Market Data........................................................................................................................................................................................8
Market value ..................................................................................................................................................................................8
Market volume...............................................................................................................................................................................9
Market Segmentation .....................................................................................................................................................................10
Geography segmentation ..........................................................................................................................................................10
Market Outlook ................................................................................................................................................................................11
Market value forecast.................................................................................................................................................................11
Market volume forecast .............................................................................................................................................................12
Five Forces Analysis ......................................................................................................................................................................13
Summary......................................................................................................................................................................................13
Buyer power.................................................................................................................................................................................15
Supplier power ............................................................................................................................................................................16
New entrants ...............................................................................................................................................................................17
Threat of substitutes...................................................................................................................................................................19
Degree of rivalry..........................................................................................................................................................................20
Leading Companies........................................................................................................................................................................21
Baosteel Group Corporation .....................................................................................................................................................21
Hebei Iron and Steel Company Limited ..................................................................................................................................25
POSCO.........................................................................................................................................................................................28
Wuhan Iron and Steel (Group) Corporation ...........................................................................................................................31
Appendix...........................................................................................................................................................................................34
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Methodology................................................................................................................................................................................34
Industry associations..................................................................................................................................................................35
Related MarketLine research....................................................................................................................................................35
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LIST OF TABLES
Table 1: Asia-Pacific steel market value: $ million, 200812.....................................................................................................8
Table 2: AsiaPacific steel market volume: thousand tons, 200812......................................................................................9
Table 3: AsiaPacific steel market geography segmentation: $ million, 2012 ......................................................................10
Table 4: Asia-Pacific steel market value forecast: $ million, 201217 ...................................................................................11
Table 5: AsiaPacific steel market volume forecast: thousand tons, 201217.....................................................................12
Table 6: Baosteel Group Corporation: key facts ........................................................................................................................21
Table 7: Baosteel Group Corporation: key financials ($)..........................................................................................................22
Table 8: Baosteel Group Corporation: key financials (CNY) ...................................................................................................22
Table 9: Baosteel Group Corporation: key financial ratios.......................................................................................................23
Table 10: Hebei Iron and Steel Company Limited: key facts ...................................................................................................25
Table 11: Hebei Iron and Steel Company Limited: key financials ($).....................................................................................25
Table 12: Hebei Iron and Steel Company Limited: key financials (CNY) ..............................................................................26
Table 13: Hebei Iron and Steel Company Limited: key financial ratios..................................................................................26
Table 14: POSCO: key facts .........................................................................................................................................................28
Table 15: POSCO: key financials ($)...........................................................................................................................................29
Table 16: POSCO: key financials (KRW)....................................................................................................................................29
Table 17: POSCO: key financial ratios ........................................................................................................................................29
Table 18: Wuhan Iron and Steel (Group) Corporation: key facts ............................................................................................31
Table 19: Wuhan Iron and Steel (Group) Corporation: key financials ($)..............................................................................31
Table 20: Wuhan Iron and Steel (Group) Corporation: key financials (CNY) .......................................................................32
Table 21: Wuhan Iron and Steel (Group) Corporation: key financial ratios...........................................................................32
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LIST OF FIGURES
Figure 1: Asia-Pacific steel market value: $ million, 200812 ...................................................................................................8
Figure 2: AsiaPacific steel market volume: thousand tons, 200812.....................................................................................9
Figure 3: AsiaPacific steel market geography segmentation: % share, by value, 2012 ...................................................10
Figure 4: Asia-Pacific steel market value forecast: $ million, 201217..................................................................................11
Figure 5: AsiaPacific steel market volume forecast: thousand tons, 201217 ...................................................................12
Figure 6: Forces driving competition in the steel market in Asia-Pacific, 2012.....................................................................13
Figure 7: Drivers of buyer power in the steel market in Asia-Pacific, 2012 ...........................................................................15
Figure 8: Drivers of supplier power in the steel market in Asia-Pacific, 2012 .......................................................................16
Figure 9: Factors influencing the likelihood of new entrants in the steel market in Asia-Pacific, 2012.............................17
Figure 10: Factors influencing the threat of substitutes in the steel market in Asia -Pacific, 2012.....................................19
Figure 11: Drivers of degree of rivalry in the steel market in Asia-Pacific, 2012 ..................................................................20
Figure 12: Baosteel Group Corporation: revenues & profitability............................................................................................23
Figure 13: Baosteel Group Corporation: assets & liabilities.....................................................................................................24
Figure 14: Hebei Iron and Steel Company Limited: revenues & profitability.........................................................................26
Figure 15: Hebei Iron and Steel Company Limited: assets & liabilities..................................................................................27
Figure 16: POSCO: revenues & profitability ...............................................................................................................................30
Figure 17: POSCO: assets & liabilities ........................................................................................................................................30
Figure 18: Wuhan Iron and Steel (Group) Corporation: revenues & profitability ..................................................................32
Figure 19: Wuhan Iron and Steel (Group) Corporation: assets & liabilities...........................................................................33
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MARKET OVERVIEW
Market definition
The steel market consists of the production of crude steel in the stated country or region.
Crude steel production refers to production of first solid steel product upon solidification of liquid steel. It includes Ingots
(in conventional mills) and Semis (in modern mills with continuous casting facility). Crude steel also includes liquid steel,
which goes into production of steel castings.
Market values have been calculated using appropriate regional annual average steel prices.
Market shares reflect volumes of steel produced by a company in respective market.
An y currency con versions used in this report have been calculated using constant annual 2012 exchan ge rates.
For the purposes of this report, Asia-Pacific comprises Australia, China, India, Indonesia, Japan, New Zealand,
Singapore, South Korea, Taiwan, and Thailand.
Market analysis
After recovering from a contraction in value in 2009, the Asia -Pacific steel market posted a double digit growth in the
2010-11 period. The market declined in 2012 and 2013 again, due to falling prices. However, the market is expected to
see recovery in the forecast period, which should be followed by a strong growth towards the end of 2017.
The Asia-Pacific steel market had total revenues of $746.0bn in 2012, representing a compound annual growth rate
(CAGR) of 6.9% between 2008 and 2012. In comparison, the Chinese and South Korean markets grew with CAGRs of
9.3% and 6.4% respectively, o ver the same period, to reach respective values of $530.8bn and $51.2bn in 2012.
Market consumption volume increased with a CAGR of 7.0% between 2008 and 2012, to reach a total of 1,007.0 million
units in 2012. The market's volume is expected to rise to 1,311.8 million units by the end of 2017, representing a CAGR
of 5.4% for the 2012-2017 period.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 7.5% for the five -year period 2012
- 2017, which is expected to drive the market to a value of $1,071.2bn by the end of 2017. Comparatively, the Chinese
and South Korean markets will grow with CAGRs of 8.7% and 2.2% respectively, over the same period, to reach
respective values of $806.8bn and $57.1bn in 2017.
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MARKET DATA
Market value
The Asia-Pacific steel market shrank by 4% in 2012 to reach a value of $745,999.5 million.
The compound annual growth rate of the market in the period 200812 was 6.9%.
Table 1: Asia-Pacific steel market value: $ million, 200812

Year
$ million
million
2008
572,192.7
445,078.4
2009
466,909.1
363,183.8
(18.4%)
2010
621,578.1
483,492.6
33.1%
2011
777,263.0
604,591.7
25.0%
2012
745,999.5
580,273.4
(4.0%)
CAGR: 200812
SOURCE: MARKETLINE
% Growth
6.9%
M AR KE TL IN E
Figure 1: Asia-Pacific steel market value: $ million, 200812
SOURCE: MARKETLINE
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Market volume
The Asia-Pacific steel market grew by 3.7% in 2012 to reach a volume of 1,006,973.5 thousan d tons.
The compound annual growth rate of the market in the period 200812 was 7%.
Table 2: AsiaPacific steel market volume: thousand tons, 200812

Year
thousand tons
2008
768,663.0
2009
803,976.0
4.6%
2010
897,369.8
11.6%
2011
971,336.0
8.2%
2012
1,006,973.5
3.7%
CAGR: 200812
SOURCE: MARKETLINE
% Growth
7.0%
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Figure 2: AsiaPacific steel market volume: thousand tons, 200812
SOURCE: MARKETLINE
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MARKET SEGMENTATION
Geography segmentation
China accounts for 71.2% of the Asia-Pacific steel market value.
Japan accounts for a further 10.6% of the Asia-Pacific market.
Table 3: AsiaPacific steel market geography segmentation: $ mil lion, 2012

Geography
2012
China
530,838.2
71.2
Japan
79,441.3
10.6
India
57,459.8
7.7
South Korea
51,171.9
6.9
Rest of Asia-Pacific
27,088.4
3.6
745,999.6
100%
Total
SOURCE: MARKETLINE
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Figure 3: AsiaPacific steel market geography segmentation: % share, by value, 2012
SOURCE: MARKETLINE
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MARKET OUTLOOK
Market value forecast
In 2017, the Asia-Pacific steel market is forecast to have a value of $1,071,230.2 million, an incr ease of 43.6% since
2012.
The compound annual growth rate of the market in the period 201217 is predicted to be 7.5%.
Table 4: Asia-Pacific steel market value forecast: $ million, 201217

Year
$ million
million
% Growth
2012
745,999.5
580,273.4
(4.0%)
2013
687,596.1
534,844.5
(7.8%)
2014
780,200.3
606,876.4
13.5%
2015
862,086.3
670,571.2
10.5%
2016
960,103.0
746,813.2
11.4%
2017
1,071,230.2
833,253.1
11.6%
CAGR: 201217
SOURCE: MARKETLINE
7.5%
M AR KE TL IN E
Figure 4: Asia-Pacific steel market value forecast: $ million, 201217
SOURCE: MARKETLINE
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Market volume forecast

In 2017, the Asia-Pacific steel market is forecast to have a volume of 1,311,831.7 thousand tons, an increase of 30.3%
since 2012.
The compound annual growth rate of the market in the period 201217 is predicted to be 5.4%.
Table 5: AsiaPacific steel market volume forecast: thousand tons, 2012 17

Year
thousand tons
% Growth
2012
1,006,973.5
3.7%
2013
1,059,004.0
5.2%
2014
1,121,213.5
5.9%
2015
1,177,821.4
5.0%
2016
1,242,495.9
5.5%
2017
1,311,831.7
5.6%
CAGR: 201217
SOURCE: MARKETLINE
5.4%
M AR KE TL IN E
Figure 5: AsiaPacific steel market volume forecast: thousand tons, 2012 17
SOURCE: MARKETLINE
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FIVE FORCES ANALYSIS

The steel market will be analyzed taking steelmakers as players. The key buyers will be taken as end -users, coming
from numerous industries, but mainly automotive, construction and engineering firms, which utilize steel in the production
of their goods, and producers of raw materials, such as iron ore and coal as the key suppliers.
Summary
Figure 6: Force s driving competition in the steel market in Asia -Pacific, 2012
SOURCE: MARKETLINE
M AR KE TL IN E
The steel industry is competitive and subject to cyclical swings, arising from factors, such as: excess capacity, regional
demand and supply imbalances, volatile swings, in market demand and prices (more recently exacerbated by swings in
input prices), as well as the debt crisis in Euro zone.
The industry is receptive to general economic conditions and reliant on the condition of a number of other industries,
including automotive, appliance, construction and energy industries. As these industries experience a downturn, the steel
industry usually follows their trend.
Steel prices decreased in 2013, due to the impact of the economic slowdown and contracting proper ty construction
market. Construction is slowly recovering in the U.S., weak in the EU and moderate in China at a best. There are
however opportunities for steel price rebounds in the near term, due to better economic prospects in the Americas,
Europe and Asia, which is providing impetus for steel traders and thus could drive up overall steel demand.
Mining giants supplying the steel industry with necessary raw materials, including iron ore and coking coal, have very
strong bargaining power. Thus, backward integration is a much forayed strategy by steel companies. Currently, many
leading steel companies are looking to pursue mine investments, as rising costs for steelmaking ingredients squeeze
their margins.
Some of the major steel consumption sectors, i.e. car manufacturing, oil and gas, shipping, consumer durables, and
power generation enjoy high buyer bargaining power and get favorable deals. Small and retail consumers, who are
scattered and consume a significant part, do not enjoy these benefits.
Steel has very low barriers in terms of product differentiation, as it does not fall into the luxury or specialty goods. Thus
there is no substantial price difference.
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Entering the steel industry requires significant capital outlay, which tends to discourage new comers with insufficient
capital. High fixed costs ensure a certain degree of rivalry, as companies are subsequently committed to a certain scale
of operations, in order to remain profitable.
Substitutes exist in the form of aluminum, plastics and composi tes, posing a threat, particularly in automotive
manufacture. However, steel plants would become sunk costs to the steelmaker and the use of substitute materials may
be inferior in buyer industries.
Finally, as the steel market is cyclical and highly affected by macroeconomic conditions, rivalry tends to increase,
particularly in a declining market that is hard to exit.
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Buyer power
Figure 7: Drivers of buyer power in the steel market in Asia -Pacific, 2012
SOURCE: MARKETLINE
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Steel is the most widely used metal and most recycled material on Earth, so there are many buyers within this market. In
many countries, there is a tendency for high-volume end-users to purchase direct, while low-volume customers buy from
stockholders and service centers.
The buyers are primarily large sized, which tends to strengthen their power. For example, the harder buyers are
competing in their industry, the more they will push for lower input prices from their suppliers. Since automotive
manufacturers operate in a highly competitive industry and are one of the largest consumers of steel, they actively push
prices down. Prices fall due to the pressure of powerful buyers, such as General Motors, Toyota and Volkswagen, and
leading can producers, such as Crown Holdings. As a consequence the industry becomes less profitable.
Small and retail buyers who are scattered and consume a significant part do not, however, enjoy these benefits. A large
investment would be required for steel consumers to begin utilizing other, cheaper materials in the manufacture process,
which reduces buyer power. Some automotive companies have started using plastic in their production of cars; however,
this threat is low, as steel is still required for the frame. Similarly, construction business will also rely on steel into the
future for augmenting structures.
Players tend to seek to differentiate themselves by focusing on added -value, specialty products, especially when selling
in the more mature markets. However, as steel is commoditized, the absence of a unique product and the limited
potential for product differentiation strengthens buyers power.
Most buyers are unlikely to integrate backward into steelmaking; however, players may integrate forward into buye r
businesses. Forward integration coupled with the necessity of steel products to the success of the buyers' businesses
dilutes buyers' power.
Overall, buyer power is assessed to be moderate.
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Supplier power
Figure 8: Drivers of supplier power in the steel market in Asia -Pacific, 2012
SOURCE: MARKETLINE
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The bargaining power of suppliers is low for the fully integrated steel plants, as they have their own mines of key raw
material like iron ore and coal. However, those who are non-integrated or semi-integrated, have to depend on supplier,
for example SAIL, which imports coking coal.
Globally, the top three mining giants BHP Billiton, CVRD and Rio Tinto supply nearly two -thirds of the processed iron ore
to steel mills and command very high bargaining power. Increase in iron ore prices by such giants usually results in
integrated steel producers raising prices, so as to recover the raw material price hikes.
Currently, many leading steel companies are employing alternative safeguarding measures by looking to pursue mine
investments, as rising costs for steelmaking ingredients squeeze margins. This backward integration is a much forayed
strategy by steel companies, for example Nippon Steel & Sumitomo Metal and POSCO are in search of mines to offset
iron ore price raises in the long run.
Steelmakers are adjusting to a shift in the pricing of iron ore and coking coal after Vale, BHP Billiton and rival mining
companies abandoned a 40-year tradition of annual prices in favor of the quarterly, index-linked iron ore contracts
system. Having to pay iron ore prices that change on a quarterly basis, instead of an annual basis, will leave these
steelmakers vulnerable to significant price volatility risk.
Manufacturers are extremely sensitive to shifts in their cost base, particularly during economic recovery. Recent demand
increases are not enough for companies to be able to push through any price increases. A significant increase in costs
could also put further strain on companies' cash flow positions and finance requirements, which already pose a risk to a
strong upturn.
Although the new system creates the opportunity for buyers to engage in hedging tactics, supply will still remain largely
in the hands of just three firms. Thus, it is unlikely that quarterly pricing and a swaps market will create fair conditions in a
clearly oligopolistic market.
Overall, supplier power is assessed to be strong.
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New entrants
Figure 9: Factors influencing the likelihood of new entrants in the steel market in Asia -Pacific,
2012
SOURCE: MARKETLINE
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To expand market share, build synergies, and extend supply chains, merger and acquisition activity took off from 2000 to
2008. In 2009, experiencing the impact of the global economic downturn, companies focus shifted from business
expansion to survival, resulting in less M&A activities than seen historically. However, 2012 witnessed a surge in
acquisition deals yet again. Japan's largest steel maker N ippon Steel Corporation merged with Sumitomo Metal
Industries to form the world's second biggest steel company, Nippon Steel & Sumitomo Metal Corporation (NSSMC).
There are a variety of reasons why steel companies pursue integration; achieving economies o f scale, increasing
negotiating power with customers and vendors, competing successfully against incumbents, and entering new markets.
For example, POSCO sees M&A as a key component to their future growth. Their 10 -year plan lays out the goal of
increasing annual production from 33 million to above 50 million tons, as well as plans to expand non -steel revenues, is
heavily reliant on acquisitions. This trend puts smaller and weaker companies out of the market and lowers the risk of
newcomers.
Steelmaking requires large capital outlay: blast furnaces, basic oxygen converters, rolling mills, transportation
infrastructure, etc. to deliver high volumes of raw materials. This tends to discourage newcomers with insufficient capital.
Similarly, environmental compliance and remediation in many cases substantially increases capital requirements and
operating costs. International environmental requirements vary. While standards in the West, Japan and Australia are
similar and governments have imposed demanding operating regulations, other regions, such as China and India, have
substantially less requirements that may give competitors in these countries a competitive advantage.
In some cases governments employ strategies, for example via tariffs subsidies, loans and im port restrictions, to ensure
that their domestic market remains competitive. In many cases, this has allowed the local steel market to continue
operations even when better quality, cheaper steel could be imported from another country.
Variable costs in this market are high as the main outgoings are transportation and energy which have both faced
increased prices and the highly cyclical nature of the steel market coupled with the instability of current market conditions
acts as a further deterrent to new entrants.
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Consequently, these factors make new companies less likely to enter and the overall threat is thus assessed to be
moderate.
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Threat of substitutes
Figure 10: Factors influencing the threat of substitute s in the steel market in Asia-Pacific, 2012
SOURCE: MARKETLINE
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Steel is a unique material. In addition to an attractive mix of strength, quality, cost competitiveness, and adaptability,
steel is uniquely recyclable. The ability to make full use of ferrous scrap (the product of earlier industrial production),
makes steel environmentally attracti ve and reduces the burden on the worlds resources.
There are potential substitutes for steel available. In most applications steel competes either with less expens ive
nonmetallic materials, or with more expensive materials that have a performance advantage, including aluminum and
plastics in the motor vehicle industry; aluminum, concrete, and wood in construction; and aluminum, glass, paper, and
plastics in packaging manufacturing. Aluminum or less -common materials like fiberglass (glass -reinforced plastic) can be
especially advantageous in the automotive industry, where manufacturers are looking to use lighter materials.
It is possible for substitutes to fulfill the buyers' needs more effectively than the original commodity. For example, an
aluminum car may be lighter and so more fuel-efficient than a steel car. Furthermore, metals such as steel can corrode
whereas reinforced plastic is more durable. The ability of end-users to adopt substitutes means that steelmakers cannot
increase their prices indefinitely; at some point, the substitutes will be more cost-effective.
However, these alternatives are hardly 'drop-in replacements'. Using them would require substantial re-tooling of an
assembly line. It is likely that certain kinds of large buildings or civil engineering projects would become very difficult t o
construct without using materials, such as reinforced concrete, which gains its structural strength from steel. Thus,
although the price of the alternatives may be favorable in some market conditions, switching costs are likely to be very
high.
Since steel is 100% recyclable this also lowers the threat of substitutes somewhat, especially in climate where society
places heavy focus on the environment and sustainability. More steel is recycled worldwide annually than all other
materials combined, with high recycling rates. This large percentage of recycled steel, if it continues to increase, could
eventually start to compete with and impact the mining operations of the main players, but the image benefits gained
from recycled steel outweighs the problems, as most of the major players are involved in the recycling process.
Overall, the threat from substitutes is moderate.
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Degree of rivalry
Figure 11: Drivers of degree of rivalry in the steel market in Asia -Pacific, 2012
SOURCE: MARKETLINE
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The market is tending towards consolidation, and is represented by several large mul tinational players, including
POSCO, Baosteel, Hebei and Wuhan. Steel is a commodity difficult to diversify strongly; however, different customers
require different specifications of steel (e.g. consistency in physical properties of steel, variations in st rength, hardness
and bending properties) and steel producers tend to specialize, thereby reducing competition but also limiting the size of
their potential market.
It has become a mark of the most successful players that although they cannot diversify ste el products too greatly, they
can diversify into the markets that their products rely upon, for instance Nippon Steel & Sumitomo Metal Corporation has
businesses in shipping, engineering & construction, chemicals, and system solutions among others. Althoug h this
diversification has protected the larger players from cost increases to some extent, it increases rivalry.
Another recent tactic has been to diversify mine locations to try to diminish the impact of the regional market forces.
Nippon Steel & Sumitomo Metal Corporation, for example, controls mines in Brazil, Australia and Canada amongst
others. The benefits of this are that different regions have different regulations and conditions affecting the market. China
for instance, has less stringent regulation, but more funding for domestic steel businesses, whereas the European
market is developed and open but businesses have increased regulation.
The importance of scale economies in the steel market favors larger companies, which means that even more
consolidation through mergers and acquisitions is to be expected, especially in the more fragmented markets. Some of
the most successful players are products of mergers and acquisitions and typically are very large international
corporations, with interests around the globe.
Exit barriers are high, because many of the major tangible assets are highly specific to their market, and thus harder to
divest. In this situation, players are strongly motivated to remain in the market even when conditions are difficult,
boosting the rivalry.
Finally, as the steel market is cyclical and highly affected by macroeconomic conditions, rivalry tends to increase,
particularly in a declining market that is hard to exit.
Overall, rivalry is assessed to be strong.
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LEADING COMPANIES
Baosteel Group Corporation
Table 6: Baosteel Group Corporation: key facts
Telephone:
Baosteel Tower, Pu Dian Road 370, Pudong New District, Shanghai

200122, CHN
86 21 5835 0000
Fax:
86 21 6840 4832
Website:
www.baosteel.com
Financial year-end:
December
Head office:
SOURCE: COMPANY WEBSITE
M AR KE TL IN E
Baosteel Group Corporation (Baosteel) is engaged in producing steel products. Its product series, namely straight
carbon steels, stainless steels and special steels, are used in industries such as automobile, home appliances,
petrochemical, machine building, energy and transportation, construction and decoration, metalwork, aerospace and
aviation, nuclear energy, and electronic devices. Baosteel's products are sold in domestic market and also exported to
more than 40 countries and areas including Japan, Korea and other American and European countries.
The company operates through seven business sectors: iron and steel, resource development and logistics, secondary
steel processing, engineering technology services, coal chemical, financial investment, and production services.
In iron and steel sector, Baosteel is engaged in mining, smelting and processing of ferrous metallurgy, iron and steel
trade, and metallurgical engineering technology service. It produces automotive sheets, electric steel, stainless steel,
special steel, steel tubes and pipes, as well as flat and tubular product market. The company operates this business
sector through its subsidiaries: Baoshan Iron & Steel Co, Xinjiang Bayi Iron & Steel Co, Ningbo Iron & Steel Co,
Guangdong Shaoguan Iron & Steel Co, Baosteel Stainless Steel Co, and Baosteel Special Material Co.
The resource development and logistics sector of Baosteel is mainly operated through its s ubsidiary, Baosteel
Resources, which deals with iron ore and metallurgical auxiliary materials such as fine ore, lump ore, pellet, limestone,
dolomite, serpentine and olivine. Baosteel Resources owns 19 subsidiaries in China, and supplies iron ore to count ries
like Australia, Brazil, India, Chile and South Africa.
Baosteel's secondary steel processing business sector is managed through its subsidiary Baosteel Metal, which is
involved in metal packaging business to produce two-piece steel can (pop-top can) for food industry; industrial gas
business to produce pipeline gas with the development of liquid gas as the main and develops and produces hydrogen,
carbon dioxide, medial gas, special gas and rare gas and also involved in the development and utilization o f the new
energy products related to industrial gas; automotive component business for precision manufacture and machining of
components for mainstream automakers; wire product business to process and produce various steel wires; and
automobile trading business to provide automobile trading and service as well as the second -handed vehicles trading,
including automobile sales, maintenance, replacement, lease and relevant service.
The engineering technology service sector of Baosteel provides its services to large-scaled industrial and urban
construction projects for consolidating the internal and external resources in the field of engineering technology, the
business portfolio structure with engineering technology, IT, equipment manufacturing and steel structure. This sector is
managed through the company's subsidiaries: Baosteel Engineering & Technology Group Co, Shanghai Baosight
Software Co, Shanghai Baosteel Equipment Maintenance Co, Shanghai Baosteel Industrial Inspection Corp, and
Shanghai Baohua International Tendering Co.
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Baosteel's coal chemical sector is a resources utilization type industry that is operated through the company's subsidiary
Shanghai Baosteel Chemical. It offers 50 varieties of products including refined coke oven gas, benzene, naphtha lenes,
phenols, quinolines, oils, cumarone, ammonium sulfate, carbazole, anthraquinone, pitch coke, and carbon black series,
which are extensively applied in the fields of building, medical, pesticide, plastic, tire and dye.
Baosteel through its financial investment sector acts as a financial solution provider. It provides finance services
including research, investment and finance, acquisition and merger for the main steel business and other related sectors
of the group, and explores the new route to expand the integration of industry with finance. This sector is managed
through the company's subsidiaries: Huabao Investment Co, Huabao Trust Co, Fortune SG Fund Management Co, and
Huabao Securities Co.
The production service sector of Baosteel provides integration service for the production and operation of main steel
business, coordinates to realize the lean and efficient operation of main steel business. This sector is managed through
its subsidiaries: Baosteel Developing Co, Baosteel Group Shanghai Meishan Co, Baosteel Group Shanghai No.1 Iron &
Steel Co, and Baosteel Group Shanghai No.5 Iron & Steel Co.
Key Metrics
The company recorded revenues of $30,343m in the fiscal year ending December 2012, a decrease of 14.1% compared
to fiscal 2011. Its net income was $1,653m in fiscal 2012, compared to a net income of $1,110m in the preceding year.
Table 7: Baosteel Group Corporation: key financials ($)

$ million
2008
2009
2010
2011
2012
29,644.3
23,532.9
32,070.0
35,309.1
30,342.9
1,013.2
921.5
1,990.8
1,110.5
1,652.8
Total assets
31,691.0
31,868.8
34,233.0
36,615.1
33,962.4
Total liabilities
20,508.9
15,831.6
16,592.1
18,637.1
15,370.9
43,789
42,318
42,308
43,041
32,598
Revenues
Net income (loss)
Employees
SOURCE: COMPANY FILINGS
M AR KE TL IN E
Table 8: Baosteel Group Corporation: key financials (CNY)

CNY million
2008
2009
2010
2011
2012
187,103.0
148,530.0
202,413.0
222,857.0
191,512.0
6,395.0
5,816.0
12,565.0
7,009.0
10,432.0
Total assets
200,021.0
201,143.0
216,065.0
231,100.0
214,357.0
Total liabilities
129,444.0
99,923.0
104,723.0
117,630.0
97,015.0
Revenues
Net income (loss)
M AR KE TL IN E
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Page | 22
Table 9: Baosteel Group Corporation: key financia l ratios

Ratio
2008
2009
2010
2011
2012
Profit margin
3.4%
3.9%
6.2%
3.1%
5.4%
Revenue growth
(17.8%)
(20.6%)
36.3%
10.1%
(14.1%)
Asset growth
(43.9%)
0.6%
7.4%
7.0%
(7.2%)
Liabilities growth
63.6%
(22.8%)
4.8%
12.3%
(17.5%)
Debt/asset ratio
64.7%
49.7%
48.5%
50.9%
45.3%
Return on assets
2.3%
2.9%
6.0%
3.1%
4.7%
$676,981
$556,096
$758,013
$820,360
$930,820
$23,139
$21,775
$47,054
$25,801
$50,703
Revenue per employee

Profit per employee
M AR KE TL IN E
Figure 12: Baosteel Group Corporation: revenue s & profitability
M AR KE TL IN E
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Figure 13: Baosteel Group Corporation: a ssets & liabilities
M AR KE TL IN E
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Hebei Iron and Steel Company Limited

Table 10: Hebei Iron and Steel Company Limited: key facts
Telephone:
No 40 Yuhua West Road, Shijiazhuang City, Hebei Shiqiao, Western

050000, CHN
86 311 6677 0709
Fax:
86 311 6677 8711
Website:
www.hebgtgf.com
Financial year-end:
December
Ticker:
709
Stock exchange:
Shenzhen
Head office:
M AR KE TL IN E
Hebei Iron and Steel Company are engaged in the smelting, processing and distribution of iron and steel products. The
company primarily operates in China, where it is headquartered Shijiazhuang City.
It offers a range of products including rods, wires, hot-rolled strip steel, hot-rolled sheet, cold rolled sheet, galvanized
sheet, color coated steel, welded pipes, vanadium pentoxide products, vanadium nitrogen alloy and ferrovanadium
products.
It is also engaged in the manufacture and distribution of coke, industrial gas, and chemical products, as well as in import
and export trading business.
The companys products are used in automobile, petroleum, railways, bridges, construction, electric power,
transportation, machinery, shipbuilding, light industry, household appliances, and other applications.
Key Metrics
to fiscal 2011. Its net income was $17m in fiscal 2012, compared to a net income of $219m in the preceding year.
Table 11: Hebei Iron and Steel Company Limited: key financials ($)
$ million
Revenues
Net income (loss)
Total assets
Total liabilities
2008
2009
2010
2011
2012
17,945.1
13,813.6
19,773.7
21,126.8
16,682.1
372.0
149.6
274.4
219.1
17.3
14,172.4
16,277.0
21,387.6
22,346.3
24,523.7
9,598.4
11,510.5
14,542.2
15,251.8
17,462.1
M AR KE TL IN E
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Page | 25
Table 12: Hebei Iron and Steel Company Limited: key financials (CNY)
CNY million
2008
2009
2010
2011
2012
113,262.0
87,185.9
124,803.6
133,343.7
105,291.0
2,348.1
944.2
1,731.9
1,383.0
109.0
Total assets
89,450.5
102,733.7
134,990.2
141,040.7
154,784.0
Total liabilities
60,581.1
72,649.5
91,784.4
96,263.5
110,213.6
Revenues
Net income (loss)
M AR KE TL IN E
Table 13: Hebei Iron and Steel Company Limited: key financial ratios
Ratio
Profit margin
2008
2009
2010
2011
2012
2.1%
1.1%
1.4%
1.0%
0.1%
Debt/asset ratio
67.7%
70.7%
68.0%
68.3%
71.2%
Return on assets
5.3%
1.0%
1.5%
1.0%
0.1%
M AR KE TL IN E
Figure 14: Hebei Iron and Steel Company Limited: revenues & profitability
M AR KE TL IN E
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Figure 15: Hebei Iron and Steel Company Limited: assets & liabilities
M AR KE TL IN E
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POSCO
Table 14: POSCO: key facts
Head office:
1 Goedong-dong, Nam-Gu, Pohang City, Gyeongsangbuk-do, KOR
Telephone:
82 2 3457 1085
Fax:
82 2 3457 1982
Website:
www.posco.com
Financial year-end:
December
Ticker:
005490, PIDD, PKX
Stock exchange:
Seoul, London, New York
M AR KE TL IN E
POSCO is a South Korea-based fully integrated steel manufacturing company. It manufactures and sells various steel
products such as hot rolled and cold rolled products, plates, wire rods, silicon steel sheets, and stainless steel products.
The company operates in South Korea, Japan, China, North America, and other parts of the Asia -Pacific region. Its key
customers include the automotive, shipbuilding, home appliance, engineering, and machinery industries.
POSCO operates through four reportable segments: steel; trading; engineering and construction; and others.
The steel segment produces steel and other related products. Poh ang Works and Gwangyang Works are the company's
major steel production facilities. Pohang Works has 16.7 million tons of annual crude steel and stainless steel production
capacity, and Gwangyang Works has an annual crude steel production capacity of 20.8 m illion tons.
The trading segment exports and imports various steel products that are both obtained from and supplied to POSCO. It
is also engaged in the export and import of steel products between other suppliers and purchasers in South Korea and
overseas. The company's consolidated subsidiaries engaged in steel trading include POSCO Steel Service & Sales that
primarily focuses in the domestic market, and POSCO Asia located in Hong Kong, POSCO Japan located in Tokyo,
Japan, and POSCO America Corporation located in New Jersey, the US.
The engineering and construction segment is engaged in the planning, designing, and construction of industrial plants,
civil engineering projects, and commercial and residential buildings, both in South Korea and overseas. As a part of this
segment the company operates a subsidiary POSCO Engineering & Construction (POSCO E&C) in which it has 89.5%
interest.
The company's other operations include power generation, liquefied natural gas production, network and system
integration, logistics, and magnesium coil and sheet production.
Key Metrics
to fiscal 2011. Its net income was $2,185m in fiscal 2012, compared to a net incom e of $3,238m in the preceding year.
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Page | 28
Table 15: POSCO: key financials ($)

$ million
2008
2009
2010
2011
2012
37,052.0
32,713.6
53,824.0
61,192.1
56,456.9
3,886.7
2,856.8
3,711.4
3,238.2
2,185.4
Total assets
41,684.2
44,658.2
60,310.8
69,598.0
70,358.7
Total liabilities
16,525.1
16,552.0
27,411.1
33,444.9
32,697.1
Revenues
Net income (loss)
M AR KE TL IN E
Table 16: POSCO: key financials (KRW)

KRW million
2008
2009
2010
2011
2012
41,742,636.0
36,855,001.0
60,637,860.0
68,938,725.0
63,604,151.0
4,378,751.0
3,218,425.0
4,181,285.0
3,648,136.0
2,462,080.0
Total assets
46,961,282.0
50,311,748.0
67,945,933.0
78,408,838.0
79,265,851.0
Total liabilities
18,617,077.0
18,647,434.0
30,881,259.0
37,678,918.0
36,836,433.0
Revenues
Net income (loss)
M AR KE TL IN E
Table 17: POSCO: key financial ratios

Ratio
2008
2009
2010
2011
2012
Profit margin
10.5%
8.7%
6.9%
5.3%
3.9%
Revenue growth
32.1%
(11.7%)
64.5%
13.7%
(7.7%)
Asset growth
29.5%
7.1%
35.0%
15.4%
1.1%
Liabilities growth
66.9%
0.2%
65.6%
22.0%
(2.2%)
Debt/asset ratio
39.6%
37.1%
45.4%
48.1%
46.5%
Return on assets
10.5%
6.6%
7.1%
5.0%
3.1%
M AR KE TL IN E
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Figure 16: POSCO: revenues & profitability
M AR KE TL IN E
Figure 17: POSCO: a ssets & liabilities
M AR KE TL IN E
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Wuhan Iron and Steel (Group) Corporation

Table 18: Wuhan Iron and Steel (Group) Corporation: key facts
Head office:
Changqian, Qingshan District, Wuhan City, Hubei 430083, CHN
Telephone:
86 27 8689 1000
Fax:
86 27 8630 6023
Website:
www.wisco.com.cn
Financial year-end:
December
M AR KE TL IN E
Wuhan Iron and Steel (Group) Corporation (WISCO) is a privately held company, engaged in the manufacturing and
distribution of iron and steel products.
The company's steel products include hot-rolled coils, hot-rolled section steel, hot-rolled heavy rails, cold-rolled coils,
galvanized plates, cold-rolled oriented and non-oriented silicon steel sheets, color coated plates and wire rods.
It also provides auto sheet and steel products for bridge, pipeline, pressure vessel, container, automobile, home
appliances, and light industries; and cord thread, fire-resistance and weathering steel and series steel products for
electric engineering applications.
WISCO primarily operates in China, where it is headquartered in Wuhan. It operates as a subsidiary of Wuhan Iron &
Steel(Group) CORP.
Key Metrics
to fiscal 2011. Its net income was $318m in fiscal 2012, compared to a net income of $172m in the preceding year.
Table 19: Wuhan Iron and Steel (Group) Corporation: key financials ($)
$ million
Revenues
Net income (loss)
Total assets
2008
2009
2010
2011
2012
11,619.7
8,510.4
13,258.9
15,334.2
14,464.3
821.5
240.1
299.7
171.7
318.5
11,615.8
11,617.3
14,859.4
15,226.0
15,642.2
Total liabilities
7,224.7
7,283.4
9,411.6
9,333.7
9,999.8
Employees
32,053
29,181
32,076
43,205
41,150
M AR KE TL IN E
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Table 20: Wuhan Iron and Steel (Group) Corporation: key financials (CNY)
CNY million
2008
2009
2010
2011
2012
73,338.7
53,714.2
83,685.1
96,783.2
91,292.6
5,185.0
1,515.4
1,891.6
1,083.6
2,010.0
Total assets
73,314.0
73,324.0
93,786.9
96,100.7
98,727.6
Total liabilities
45,599.3
45,969.9
59,402.1
58,910.5
63,114.7
Revenues
Net income (loss)
M AR KE TL IN E
Table 21: Wuhan Iron and Steel (Group) Corpora tion: key financial ratios
Ratio
Profit margin
2008
2009
2010
2011
2012
7.1%
2.8%
2.3%
1.1%
2.2%
Revenue growth
36.3%
(26.8%)
55.8%
15.7%
(5.7%)
Asset growth
12.9%
0.0%
27.9%
2.5%
2.7%
Liabilities growth
16.4%
0.8%
29.2%
(0.8%)
7.1%
Debt/asset ratio
62.2%
62.7%
63.3%
61.3%
63.9%
Return on assets
7.5%
2.1%
2.3%
1.1%
2.1%
$362,514
$291,642
$413,360
$354,917
$351,501
$25,630
$8,228
$9,344
$3,974
$7,739
Revenue per employee

Profit per employee
M AR KE TL IN E
Figure 18: Wuhan Iron and Steel (Group) Corporation: revenues & profitability
M AR KE TL IN E
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Page | 32
Figure 19: Wuhan Iron and Steel (Group) Corporation: asse ts & liabilities
M AR KE TL IN E
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APPENDIX
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross checked and presented in a consistent and accessible style.
Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLines in -house databases
provide the foundation for all related industry profiles
Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each
definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the
market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
-
National/Governmental statistics
International data (official international sources)
National and International trade associations
Broker and analyst reports
Company Annual Reports
Business information libraries and databases
Modeling & forecasting tools MarketLine has developed powerful tools that allow quantitative and qualitative data to
be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can
then be refined according to specific competitive, regulatory and demand -related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up -to-date
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Industry associations
International Iron and Steel Institute
Rue Colonel Bourg, 120 B-1140 Brussels, BEL
Tel.: 322 702 89 00
Fax: 322 702 88 99
www.worldsteel.org/ix.php
Related MarketLine research

Industry Profile
Global Steel
Steel in Europe
Steel in the US
Steel in Japan
Steel in China
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MARKETLINE
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KINGDOM,
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T: +44 161 238 4040 | F: +44 870 134 4371

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Market value forecast

Market volume forecast

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Table 1: Asia-Pacific steel market value: $ million, 200812

Figure 1: Asia-Pacific steel market value: $ million, 200812

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Table 2: AsiaPacific steel market volume: thousand tons, 200812

Figure 2: AsiaPacific steel market volume: thousand tons, 200812

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Table 3: AsiaPacific steel market geography segmentation: $ mil lion, 2012

Figure 3: AsiaPacific steel market geography segmentation: % share, by value, 2012

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Table 4: Asia-Pacific steel market value forecast: $ million, 201217

Figure 4: Asia-Pacific steel market value forecast: $ million, 201217

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Market volume forecast

Table 5: AsiaPacific steel market volume forecast: thousand tons, 2012 17

Figure 5: AsiaPacific steel market volume forecast: thousand tons, 2012 17

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FIVE FORCES ANALYSIS

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Baosteel Tower, Pu Dian Road 370, Pudong New District, Shanghai

SOURCE: COMPANY WEBSITE

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Table 7: Baosteel Group Corporation: key financials ($)

Table 8: Baosteel Group Corporation: key financials (CNY)

SOURCE: COMPANY FILINGS

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Table 9: Baosteel Group Corporation: key financia l ratios

Revenue per employee

Figure 12: Baosteel Group Corporation: revenue s & profitability

SOURCE: COMPANY FILINGS

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Figure 13: Baosteel Group Corporation: a ssets & liabilities

SOURCE: COMPANY FILINGS

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Hebei Iron and Steel Company Limited

No 40 Yuhua West Road, Shijiazhuang City, Hebei Shiqiao, Western

86 311 6677 8711

SOURCE: COMPANY WEBSITE

SOURCE: COMPANY FILINGS

0200 - 0998 - 2012

SOURCE: COMPANY FILINGS

SOURCE: COMPANY FILINGS

SOURCE: COMPANY FILINGS

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SOURCE: COMPANY FILINGS

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1 Goedong-dong, Nam-Gu, Pohang City, Gyeongsangbuk-do, KOR