Steel Industry in Turmoil

The steel industry's crisis in the 1990s has affected countries where labour costs have been high, direct state support meagre, trade protection low and competition in the domestic as well as international markets has increased. The ensuing crisis, mainly in the developed world, has intensified under adverse external conditions and took in its fold the rest of the world. When new investments reduced the technological superiority of steel produced in the developed world, there was a surge of investment to upscale technology and to maintain superiority. But, the thriving capital market provided conditions for similar investment in the developing countries too. At the end of the day, the world of steel gathered more plants and assets and not as much output for sale. The deepening crisis in steel brought the contending national governments on to the international arena and protection subsidies have become common. Although the steel industry has voiced strong opposition to barriers to trade, it is these barriers that the industry has sheltered behind.