Steel industry review

The International Iron and Steel Institute (IISI) has issued a formal request that all relevant competition authorities review the proposed alliance between BHP and Rio Tinto. Speaking on behalf of steel producers worldwide IISI Secretary General Ian Christmas said: “IISI supports free and fair trade in steel. Competition between steel companies promotes innovation and efficiency. It promotes the growth in steel use and serves steel’s customers and society as a whole. IISI has also supported the consolidation of steel businesses but not to the extent of creating a monopoly. Even the largest steel company in the world today accounts for less than 15% of total world steel production.” “In sharp contrast the business of seaborne iron ore is dominated by just three companies. CVRD, Rio Tinto and BHP Billiton account for over 70% of total world trade.” Concluding, Ian Christmas said: “Any further consolidation between the big three would create a virtual monopoly in the business. For this reason, not only will the steel industry strongly oppose the potential merger of BHP Billiton and Rio Tinto, but it is vital that the competition authorities in the EU, USA, China, Australia and Japan also recognise the threat that this merger poses to the interests of steel consumers and the general public. This merger is not in the public interest and should not be allowed to proceed.”
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