Some thirty-five years ago, almost half a million tons of rebars were made here in Sweden annually and a fair amount of these were exported. The period following WWII with a booming construction sector having a love affair with concrete structures must have been a golden era for this industry where cartels and a myriad of import tariffs and trade barriers were an integral part of the business reality.

But nothing lasts forever and as seen so often in the case with ruins, the underlying history almost always include an episode of a changing economic reality. In this particular case, this is very much the case where a series of factors kicking in during the early 1970s, which completely eradicated this industry in Sweden (and in many other countries as well) in the years to come.

Since the rebar production peak in 1974, the collapse in the construction sector together with steeply increasing labor costs and energy prices turned the business climate particularly hard and smaller units went under as the industry was restructuring to be more competitive.

But most importantly - what is in the steel industry is known as "long products" – girders, rebars, rails etc. are generally very basic products from a quality perspective. A massive oversupply started to become evident in the late 1960s where prices fell and stocks increased, but industry cartels and rigid import restrictions somewhat managed to cope with the harder climate. With the recession in the 1970s the situation quickly became very difficult and many steel giants were either fully or partly overtaken by state consortiums and a massive flow over subsidies was directed to this bleeding sector.

As government subsidies, tariffs and import restrictions were gradually lifted from around 1975 and onwards, the restructuring of the industry have been very ruthless and painful. Although the execution of these structural changes in the Western world has been very different in each country, the general trend has been to close down blast furnaces, get away from long products towards strip products. The larger units have concentrated to costal locations and inland units have closed unless they've managed to get very specialized.

The center of gravity for the traditional steel industry has gradually moved towards Asia where India has become an important player on the world arena with giants like Bharat, Mittal and Tata. Being an European, it is somewhat fascinating to experience the true language of globalization where former European giants like Usinor, Arbed, Cockerill-Sambre, British Steel and Hoogovens now being controlled by Indians.

Given the obvious scenario where China is becoming a significant net exporter of steel products, the years to come will be challenging for many existing players. China’s demand for long products on a +1 bn metric ton world steel market will not go on forever and a coming cool-down of the Chinese economy would certainly create a very volatile climate in the steel business.

Well - to summarize this, I think it is fair to say that we shouldn't be too sad here in Sweden that the rebar industry went under during the 1980s – if it hadn't happened then, it would have happened now. This particular factory died in the restructuring process during the 1980s and it is hard to imagine that such a small unit making something as basic as rebars even survived that long.
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