This year China announced that it will cut up to 150 million mt/year of steel capacity by 2020 at an estimated cost of 500,000 jobs. While much attention was paid to the 150 million mt of capacity, little attention was given to what the number of people expected to be laid off says about staffing levels in the China’s steel industry.
According to WIND, a Chinese information provider, China employed 3.63 million people in the “ferrous metal smelting and rolling processing industry” at the end of 2015. By way of contrast, the world’s second largest steel maker Japan employed fewer than 20 times this number — 174,000 people, according to the Japan Iron and Steel Federation — despite producing only eight times less steel.
Indeed, how inefficient China’s steel industry looks in terms of people required to make a metric ton of steel can be seen in the table below which uses statistics from WIND, national steel associations and
Worldsteel:
Crude steel production and persons employed in steel industry
| Country |
Steel output 2015 (mil mt) |
Persons employed in steel industry (‘000) |
Persons per 1,000 mt crude steel produced |
| China |
800 |
3,627 |
4.5 |
| Brazil |
33 |
110 |
3.3 |
| EU |
166 |
330 |
2.0 |
| Japan |
110 |
174 |
1.6 |
| USA |
87 |
142 |
1.6 |
Source: WIND, Brazil Steel Institute, Eurofer, JISF, AISI, Worldsteel
Although we cannot be certain that the data are classifying employment in the steel industry in the same way across the selected territories, the data appear to show that Japan and the USA are the most efficien...
