The use of steel can be traced back nearly 4,000 years in the form of weaponry and other forms of ironware, however, following the industrial revolution the usage of steel magnified exponentially. Now, there are a wide variety of steels, depending on alloys added to steel, and the usage has expanded to infrastructure, automotive and construction industries.
Carbon steel is any steel alloy which contains 0.12-2 percent carbon, or steel which does not have any minimum amount of any other alloy such as chromium, titanium, cobalt, nickel, etc. The process of adding carbon results in more solidified interior structures, strengthening the steel overall. In addition, carbon is widely available and is among the cheapest alloys for steel. However, carbon steel is less malleable than other forms of steel and tends to make the steel brittle when worked with.
Carbon Steel Market
The market size for carbon steel has crossed 1,684 million metric tons (MMT) with the carbon steel market price impacted by the raw material costs (for iron ore, nickel, and ferrous scrap), accounting for 60-80 percent of the overall cost, and utility expenses, accounting for 12-21 percent of the total costs. At a global level, high market maturity regions for carbon steel are China and Europe, while the U.S. is a medium-low maturity market. The major end-user industries are construction, accounting for 36 percent of the total demand, infrastructure for 22 percent and automobiles for 18 percent.
How To Sustain A Business In The Carbon Steel Market
There is plenty of opportunity for businesses in the carbon steel market, as carbon steel is very much in demand, especially in developing countries for infrastructure development. As carbon is a cheap allow, sustaining a business is easier after making the initial investments for setting up of the production unit.
● Maintaining a strong client base is essential to sustain a business in the carbon steel market, which can be done by maintaining quality standards and customizing services as required by the clients. Since the market is entirely dependent on downstream demand, it is important to adapt the services provided according to the needs of the market.
● The negotiation power for businesses supplying carbon steel is low to medium while the negotiation power for the buyer is medium to high. The prices of carbon steel are heavily dependent on the costs of raw material which tend to fluctuate, therefore businesses supplying carbon steel would require to adjust their prices accordingly to remain relevant in the competitive market.
● For an existing business in the carbon steel market, establishing and maintaining a brand identity is important for sustaining the business. Marketing will help gain further clients and can possibly break the rut any business finds itself in.
● Updating technology at a regular pace is another integral part of sustaining a business in the field of carbon steel since new technologies can help boost performance, productivity, and quality.
How To Grow A Business In The Carbon Steel Market
Steel, especially carbon steel has an impressive future, with the demand increasing at a steady pace globally, with a higher growth rate in developing nations driven by applications of carbon steel in infrastructure. Growing a business in the carbon steel market can be extremely profitable, especially when located in an area with less competition from other suppliers.
● The first step to growing a business in the carbon steel market is to identify the competition in the market, the potential clients in the area and the potential gaps between the services provided by competitors and the client requirements. This research will help entrepreneurs design an effective business plan based on which staff and equipment can be hired.
● Carbon steel is classified on the basis of carbon present, with low carbon steel containing a maximum of 0.3 percent carbon, medium carbon steel containing 0.3-0.6 percent carbon, high carbon steel containing 0.6-1 percent carbon and ultra-high carbon steel containing 1.25-2 percent carbon. The application of carbon steel is dependent on the percentage of carbon present, which influences the strength and flexibility of the carbon steel. Therefore, select which form of carbon steel the business should produce.
● Hire a competent staff, including experts in the field that can oversee and handle the actual production of carbon steel in a safe and cost-effective manner.
Once the carbon steel production process has been streamlined and clients have been lined up, the business is set to grow.
The use of steel has been around for centuries and adding carbon to steel further improve its strength and increase its applications. The market for carbon steel is expected to continue to witness steady growth, driven by demands from emerging markets. However, the volatile prices of carbon steel and the typically low-profit margins pose a challenge to the growth of businesses in the market.
Writer: Ethan Scott. Ethan is a freelance content writer, copyeditor, copywriter and proofreader with more than 4 years experience, based out of Boston.