ABSTRACT
Whether steel will be profitable to manufacture will depend on its price and costs. In the 1990s, India prided itself as a low-cost steelmaker in the world; however, in present times, it is in fact, a country with relatively higher costs of production in comparison to some of the world's largest and best operated steel plants. The expenses of the Chinese mills are lower than those of the non-Chinese mills, material costs being substantially lower than the non-Chinese mills. In industries such as steel, which are both large scale and high technology, technological innovations constantly replace machines and there is continual investment in what becomes accounted for as fixed costs. High-end products manufacturers tend to watch the averages rather than the marginal costs and they look to covering their average variable costs. The large steel mills seem to be the best positioned in terms of variable costs as a percentage of their net sales, and are ready to expand.
