Just as human character is exposed during hardship, so, too, is the financial strength and resolve of a business. In recent years, rapidly expanding steel capacity in China has tested the resolve of the global steel industry. China has been dumping steel on the international markets as a way to gain market share and hollow out steel production in developed countries. China's plan is not viable in the long run, and Nucor Corp. (NYSE:NUE) has used this adversity to increase market share and better position itself for the future.
China has no competitive advantage
Since the turn of the century, China has been rapidly increasing its steel capacity at the expense of developed nations. The world has an estimated 700 million tons of excess steel capacity, and China represents 350 million tons of this excess capacity. The following chart shows China's steel production from the year 2000 until 2015 compared to the United States.
