Ownership and Productivity in Vertically-Integrated Firms: Evidence from the Chinese Steel Industry

We study productivity differences in vertically-integrated steel facilities using equipment-level information on inputs and output for each of the main stages in the value chain. We obtain stage-level productivity estimates by estimating a multi-stage production system and then integrate them into estimates for integrated facilities. At this level, we do not find statistically significant differences in productivity by ownership. This conceals important differences upstream and downstream in the value chain: Private firms outperform in pig-iron and steelmaking, but lag in sintering. Inferior access to higher quality raw materials and use of less automated technology are likely sources of these differences.

Molybdenum alloying in high-performance flat-rolled steel grades

Considerable progress in developing flat-rolled steel grades has been made by the Chinese steel industry over the recent two decades. The increasing demand for high-performance products to be used in infrastructural projects as well as in production of consumer and capital goods has been driving this development until today. The installation of state-of-the-art steel making and rolling facilities has provided the possibility of processing the most advanced steel grades. The production of high-performance steel grades relies on specific alloying elements of which molybdenum is one of the most powerful. China is nearly self-sufficient in molybdenum supplies. This paper highlights the potential and advantages of molybdenum alloying over the entire range of flat-rolled steel products. Specific aspects of steel property improvement with respect to particular applications are indicated.