2009 Volume 95 Issue 10 Pages 704-709
Steel is produced from either primary iron (iron ore), secondary iron (scrap) or a mixture of both. The Utility of Stock hypothesis, which assumes that the in-use stock of constructional material is a function of GDP, was formulated and the clear correlation between the world steel stock and the GDP led to the estimation that the world demand for primary iron (iron ore) depends not on the volume of GDP but on the variation of GDP, as already reported. In this study, the world consumption of scrap (secondary iron) is computed, and the relationship between the crude steel production and the flow of primary and secondary iron is analyzed. It becomes clear that the flow of primary iron has the controlling effect on the world production of crude steel.
