Why is steel making strategic? And which bit is strategic; mining the raw materials, smelting the iron or manufacturing products?Every day a school day! Thanks, other Bob's
Nevertheless, I still believe that steel-making is strategic and countries ought to see beyond the short term commercial side even if it doesn't seem to make immediate economic sense. And manufacturing in general.
The reality is that the global steel industry is commoditised. There’s over capacity and there are countries which have significant comparative advantage over others because they have the raw materials, cheaper labour and a much larger internal demand.
So your domestic strategic steel industry can’t compete on price. And, if it can’t compete on price, why would anyone buy from it? Steel is, after all, largely commoditised.
So you would have to subsidise your domestic strategic industry to make it competitive. Which means taxing other, profitable parts of the economy more to subsidise your strategic industry. Which, in turn, means damaging the competitive advantage of those parts of the economy.
For what? When you can buy steel from any number of countries that will always be able to make it cheaper.