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Long-term trends in steel consumption

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Abstract

Since the iron and steel sector contributes considerably to industrial CO2 emissions, it is important to identify the underlying factors driving steel demand. Using a panel dataset, this paper examines the interrelation of steel demand with GDP and its composition, in particular the investment share since investment goods can be expected to be particularly steel-intensive. Our analysis confirms that there seems to be an increase of steel demand in an initial stage of economic development and a decline after economies have reached a certain level of per capita income. Moreover, we find some evidence that carbon leakage does not seem to play a role in the steel sector.

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Notes

  1. Apparent steel use measures a country's crude steel production plus net crude steel exports."

  2. However, there still might be an endogeneity problem, since apparent steel use per capita could be correlated with country-specific effects.

  3. There is an ongoing research project at World Steel Association to calculate such data.

  4. The coefficients of per capita income and per capita income squared determine at which income level steel consumption reaches its maximum.

  5. In the case of advanced economies, the dummy is 0 for the whole sample period.

  6. Running the regression for developing and advanced economies separately, leads to similar results

  7. According to calculations of Bussiere et al. (2011, p. 35), the import content of total investment tends to be larger in developing countries.

  8. The energy consumption per ton of steel in China was about 15–20 % higher than international best practice (Zhang et al. 2012).

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Acknowledgments

We thank Christoph M. Schmidt for his valuable comments and suggestions.

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Authors and Affiliations

  1. University of Duisburg-Essen and RWI Essen, Essen, Germany

    Roland Döhrn

  2. University of Bochum and RWI Essen, Essen, Germany

    Karoline Krätschell

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  1. Roland Döhrn
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  2. Karoline Krätschell
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Correspondence to Karoline Krätschell.

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Döhrn, R., Krätschell, K. Long-term trends in steel consumption. Miner Econ 27, 43–49 (2014). https://doi.org/10.1007/s13563-014-0046-8

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  • DOI: https://doi.org/10.1007/s13563-014-0046-8

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