SWOT Analysis of Steel Industry 

SWOT Analysis of Steel Industry. The chemistry of steel comprises a mixture of carbon and iron and it amplifies the resistance and strength of the alloy. Experts add other types of material chromium to make the steel resistant to oxidation and corrosion.

Steel has a lower cost and high tensile strength, and that’s why manufacturers employ steel in the production of various industries. Some of the main uses of steel are as follows;

  • Weapons
  • Electrical appliances
  • Machinery
  • Bicycles
  • Cars
  • Trains
  • Ships
  • Tools
  • Infrastructure
  • Buildings

The key facts and figures about the steel industry are as follows;

  • According to an estimate, the annual revenue of the steel industry in 2022 was 341,122 million dollars;
  • Out of which the net income of the steel industry was 47,365 million dollars.
  • Approximately 136,643 people are working for the company to manage its worldwide operations.

Some of the top steel industries are as follows;

  • Angang Steel – China
  • HBIS Group – China
  • Jef Steel Corp – Japan
  • Hunan Valin Steel Co – China
  • Tata Steel Ltd – India
  • Nucor Corp – USA
  • Baoshan Iron & Steel Co – China
  • Nippon Steel Corp – Japan
  • POSCO Holding Inc – South Korea
  • Arcelor Mittal SA – Luxembourg

Today, we’ll discuss the swot analysis of the steel industry. It is going to focus on the internal strengths and weaknesses; external opportunities and threats of the global steel industry. Here’s the swot analysis of the steel industry as follows;

Strengths of Steel Industry 

Some of the key strengths in the swot analysis of steel industry are as follows;

Easy Access to Raw Material

Iron and carbon are the key ingredients of steel, and you can easily find them on the earth’s ground. Easy access to and availability of raw materials plays a significant role in the growth and success of the steel industry. However, some other types of industries face the challenge of scarcity of resources; either the raw material is not available or costly access to it. But the steel industry has got easy access and availability to the raw material.

Cheap Labor

If we look at the top 10 world’s leading steel industries; roundabout 8 steel companies are in Asia, and the other two are in Europe and America. The main reason for the growth of the steel industry in China, India, and other Asian countries is because of the availability of cheap labor. However, the labor cost is very high in Europe and America; that’s why many brands set up their production and manufacturing facilities in Europe and America.

Quality Operations

Manpower and workforce play a significant role in the production and manufacturing of steel; because the steel industry demands intense labor work. The reason the steel industry successfully conducts its operations is because of the easy availability of labor.

Shipping & Transport

The steel industry has got a highly developed network of supply chains and distribution channels. It allows the company to have the access to the raw material so that the company could manufacture the steel and meet the customer demands.

Community Focused

According to an estimate, the steel industry contributed roundabout 98% (comprising 1.663 billion dollars) of its revenue back into society in 2019. It was in the form of building hospitals, schools, transport, and roads. The involvement of the steel industry in healthcare facilities is very high in developed. Along with community-focused steps, the company is also creating job opportunities and employing people in its industries.

Green Economy

Steel is a 100% recyclable material; it decomposes into its various building and becomes part of nature again after some time. Nowadays, the global economy is moving towards green projects for the safety of the environment and nature. But the steel industry poses no threats to the environment due to its recycling nature.

Weaknesses of Steel Industry 

Some of the main weaknesses in the swot analysis of steel industry are as follows;

High Capital Investment

It is no doubt steel industry is highly profitable and falls under the category of the world’s leading industries. But launching and establishing a steel industry requires a huge capital investment in the form of the place, equipment, machinery, and workforce. An ordinary businessman or small investor can’t start the industry without funding from banks and other investors.

Deficiencies & Risk

As I mentioned earlier the steel industry demands intensive labor work. The workforce is dealing with extremely hot and pressurized material. Overall, the environment in the production and manufacturing facility of the steel industry is very high, and it causes a lot of health and other risk factors.

Limited Productivity

Natural resources are limited and it takes a lot of time to extract iron from the ground. The demand for steel in the market has its limits and it can’t go beyond. When you add up both of these elements, then the growth and productivity of the steel industry are very compared to its size and investment.

Expensive Material

The raw material “iron” for the production of steel is also expensive, because of the labor and carriage. Sometimes, steel manufactures have to pay double in the form of carriage and transportation costs; it increases the production cost and decreases the company’s profitability.

Limited Budget for R&D

The owners in the steel industries invest a very limited almost none in research and development. In fact, they are following the decades-old methods and processes at their productions and manufacturing units without employing technology or robots.

Opportunities Available to Steel Industry 

Some of the available opportunities in the swot analysis of steel industry are as follows;


If the steel industry could invest in the development of infrastructure like supply chain roads and distribution channels; then it would speed up the processes and increase overall efficiency and effectiveness.

Merger & Acquisition

Merger and acquisition is also a great option for steel manufacturers. Small businesses should join their strengths and focus on increasing their growth and productivity. It is good for them in terms of profitability and growth; it would allow them to deal with the industry issues and challenges collectively.

High Demand & Export

The steel industry and the construction industry are complementing each other. High investment in the construction industry is increasing the demand for steel. The steel manufacturers should take advantage of the growing demand in the market, and increase their profitability and revenue by producing more.

Threats to Steel Industry 

Some of the potential threats in the swot analysis of steel industry are as follows;

Price Conscious

The price of steel is a highly sensitive matter in the steel industry, and it could badly impact the demand and sale of steel. When the production and carriage cost becomes higher due to interruption and various other factors, then it decreases the profitability for investors and owners.

Tech Development

High technological development is focusing on finding new ways to build houses and infrastructures that don’t involve a lot of steel. It is decreasing the demand for steel in the customer market, and it is not good news for manufacturers and owners because they have invested a lot of resources in the steel industry.

Limited Growth

The demand, production, and sales of steel in the market have their limits and they can’t go beyond that. The limited growth is kicking out the small investors because they can’t survive the market recession.

Conclusion: Steel Industry SWOT Analysis Example Company

After an in-depth study of the swot analysis of steel industry; we have realized that steel is the world’s leading manufacturing industry in terms of growth and profitability. If you are learning about the growing productivity of the steel company swot analysis example company, then you should keep in mind the abovementioned factors.

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