1.1 Definition and scope of study
Iron in its mineral form represents 4.2% of the Earth's crust, making it one of the most abundant elements on the planet. Moreover, this is the most produced and present metal in people's daily lives. The vast majority (about 99%) of iron ores mined are used in the manufacture of steel and cast iron, in addition to iron from others such as the ferroalloys and cement industries.
Brazil alone holds 8.3% of iron ore reserves, equivalent to 17 billion tons, the fifth highest amount in the world. However, the country is the second largest world producer of this ore with 19% of production, just behind China (21%). The largest Brazilian deposits are in Minas Gerais (61%), Mato Grosso do Sul (28%) and Pará (10.4%). Vale S.A. is the largest producer of this commodity in the world.
Steel, in turn, is basically an alloy of iron and carbon, whose main utilities are found in civil construction, the automotive industry and the manufacture of household appliances. Just to give an example, steel represents 56% of a car's weight, 55% of the refrigerator's weight 75% of the stove's weight.
China is the largest market in production and export volume, while the largest consumer markets are the European Union and the United States. In Brazil, around 34 million tons of steel are produced per year. The competition is basically formed by 14 private companies, controlled by 11 business groups, operating 30 mills in 10 Brazilian states, with 61% of production concentrated in Minas Gerais and Rio de Janeiro.
Both steel and iron are historically essential commodities for the Brazilian economy, both for the foreign and domestic markets, representing more than 10% of total exports. Prospects for growth are of around 5% for the coming years, which shows that the market is still extremely attractive to new entrants.
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