Tata, which mines all the iron ore and coal it needs, now aims to carry out primary steel production close to its iron-ore deposits, and then ship semi-finished steel for finishing close to foreign consumer markets.
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The rise in demand from China for commodities such as iron ore, steel and petroleum has helped fill government coffers.
China re-exports a lot of what it imports, turning hard drives into iPods and iron ore into steel.
The other significant industrial user is iron and steel production, though iron ore and various other metals used to make alloys are also significant costs.
Mr Swan says that, thanks to China's own stimulus last year, Australia's exports of iron ore and coal to its steel factories exceeded the government's hopes.
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CSN's main contribution will be the supply of cheap iron ore and, later on, steel slabs.
China is undergoing a sweeping infrastructure build-out that has created an almost insatiable demand for coal, copper and iron ore (for steel production).
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But in 2006, it embarked on a massive investment and construction project to build blast furnaces which use iron ore and coking coal to produce high-quality virgin steel for cars, ships and consumer durable goods.
The cargoes its ships carry encompass economically sensitive commodities like iron ore, coal, grain, and steel products.
Commodity postings for coal, steel and iron ore threaten new cyclical lows.
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Rio is betting on rapid urbanization to drive demand for steel and thus iron ore.
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But, over the past few days a string of gloomy steel production and iron ore price forecasts has trimmed the share prices of all iron ore miners with the potential for worse to come if the price projections are accurate.
The company said it expects iron-ore production to almost double and that its steel business would improve as well.
The company runs minimills, which produce steel from scrap rather than iron ore and manufacture products in smaller batches than traditional plants.
The company owns and operates a fleet of 29 dry bulk carriers that transport a wide range of commodities, including coal, iron ore, grains, bauxite, phosphate, fertilizers and steel products.
Iron ore and coking coal are used in the production of new steel.
As the iron ore pellets produced by the division are used exclusively by steel manufacturers, the demand for steel directly impacts the demand for iron ore and hence the price commanded.
As long as that continues then steel demand will hold up and thus so will iron ore prices.
Upstream producers such as Brazil's Companhia Vale do Rio Doce (CVRD), the world's largest producer of iron ore and pellets, are trying to get into the business of making quality steel.
And Chinese stocks all through the steel industry, from iron ore to finished goods, which were built up in the expectation of a bigger stimulus package than has yet materialised, are now being run down, amplifying the downward price swing.
Iron ore and transportation costs, coupled with higher energy prices, will likely cause national steel consumption to cool by at least 2.6% to as much as 4.6% this year.
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The huge size of the Chinese industry now makes it a dominant force in both the global steel market and the market for production inputs such as iron ore and metallurgical coal.
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Yet as a society advances and that first stage of industrialisation is removed to make way for second and third waves then steel demand may go one way but iron ore demand another.
Between them those three miners account for about 70% of the iron ore imported by China, which has been both a prolific producer and consumer of steel during its hectic construction boom of the past 20 years.
China's iron and steel industry association clamored Tuesday for a 40% cut in iron ore prices.
Annual iron ore contracts are currently being negotiated with suppliers, and China is the world's biggest steel consumer.
If there is an increase in steel production, that triggers an increased demand for iron ore, electricity, and labor.
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The glut of iron ore developing in the international market is good news for steel consumers such as car makers and builders but will hit the profits of BHP Billiton, Rio Tinto and Vale, the big three of the seaborne iron ore trade.
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