What is steel?
Steel is an alloy of iron and carbon — typically containing less than 2% carbon by weight. It is the most widely used structural material on Earth. Around 1.9 billion tonnes of crude steel are produced globally every year, enough to build more than 180,000 Eiffel Towers. Steel is in the buildings you live in, the vehicles you travel in, the appliances in your kitchen, and the infrastructure that connects cities.
Pure iron is soft and weak. Adding small amounts of carbon dramatically increases its strength and hardness. Adding other elements — chromium, nickel, manganese, silicon — allows steelmakers to create hundreds of specialised grades for every application imaginable.
The steelmaking process at a glance
At its core, making steel involves three things: getting iron in a molten form, burning off unwanted impurities (primarily excess carbon), and then shaping the result into useful products. The diagram below shows the full sequence of steps from raw materials through to the finished product.
Two routes to steel
There are two main ways to make steel, and both are used widely around the world. The choice between them depends on the available raw materials, energy costs, and the type of steel product required.
The integrated route starts with iron ore and coal. Iron ore is reduced to liquid iron in a blast furnace, then the liquid iron is refined into steel in a Basic Oxygen Furnace (BOF).
The EAF mini-mill route starts with scrap steel. An Electric Arc Furnace (EAF) uses high-powered electricity to melt the scrap directly into liquid steel, skipping the ironmaking step entirely.
Why two routes exist
The existence of two distinct steelmaking routes reflects a century of industrial evolution driven by different resource endowments and market conditions.
The integrated BF-BOF route emerged first, built around abundant iron ore and coking coal. Large integrated plants with blast furnaces, sinter plants, coke ovens, and BOF shops require capital investment of £2–5 billion and operate continuously at scales of 3–10 Mt/year. They are optimised for high-volume, consistent quality output of flat-rolled products — automotive, appliance, packaging grades — where steel cleanliness and precise chemistry are critical. Integrated steelmaking grew from essentially 100% of production in 1950 to today's ~70%.
The EAF mini-mill route grew from 5% of world production in 1970 to approximately 30% today. Mini-mills use scrap steel as the primary raw material, powered by electricity rather than coal — typically 300–450 kWh per tonne of steel. This makes them far less capital-intensive (£200–500M per Mt/year capacity) and more flexible in production scheduling. EAF plants can be shut down overnight and restarted, unlike blast furnaces which must run continuously. They can also be located near scrap sources and steel-consuming markets rather than iron ore and coking coal deposits.
The historical limitation of the EAF route was product quality: scrap contains residual elements (copper, tin, nickel, chromium) that cannot be removed by oxidation — the so-called "tramp elements." These accumulate with each recycling cycle and restrict EAF steel to applications tolerant of slightly higher residuals — long products (rebar, beams, wire rod) and commodity flat products. Modern EAF technology, using DRI as a clean metallic charge to dilute tramp elements, is increasingly producing automotive-grade flat products — narrowing the quality gap with integrated steelmaking.
The choice of route for a given plant or country depends on: scrap availability (EAF economics improve with local scrap supply), electricity cost (EAF is energy-intensive — a £10/MWh electricity cost difference changes EAF economics by approximately £3–4/t), local iron ore and coking coal access, and product mix requirements.