On what factors does the location of iron and steel industry depend?

QuestionOn what factors does the location of iron and steel industry depend? With the passage of time the iron and steel industries gradually shifted to the coastal areas, explain the reason. – 9 December 2021


Iron and steel industry is considered as the pivot of economic development of a country. The first large-scale factory in India was established in 1907 by Jamsetji Tata at a place called Sakchi in the valley of the Subarnarekha river in the state of Jharkhand. Much attention was paid to it under the Five Year Plans after independence and at present 7 factories are producing ferrous steel.

The location of iron and steel industry is determined by various factors, such as:

Raw material:

  • Near Coalfields: Due to the inefficiency of engines during the Industrial Revolution, it was cheaper to transport iron ore to coalfields than to transport coal to iron ore fields. For example: Appalachian-Pennsylvania in the United States, Wuhan in China.
  • Near Iron Ore Mines: Industries are established near iron ore, manganese, limestone, dolomite mines to reduce the transportation cost. For example: Rourkela in India and Kuznetsk Basin in Western Siberia.


  • Location close to coastal areas minimizes the cost of transporting raw materials (mainly imported) from port to factories. For example Chicago in America and Visakhapatnam in India.

Modern Technology:

  • Such as electric smelters, open furnace systems etc. have helped in shifting steel industries away from coal, iron and ore reserves by reducing energy requirement along with efficient use of scrap metal. For example, Bhushan Steel Plant in Ghaziabad.


  • Power supply is necessary for machinery to work. Thus, power supply becomes the determining factor in the location of any manufacturing industry. For example, Damodar Valley Corporation supplies hydropower to Durgapur Steel Plant and Bokaro Steel Plant.

Strategic Reasons:

  • After World War II, the United States and the Soviet Union adopted a policy of not concentrating industries in one region. Thus. In the United States, some plants were set up in the western region such as California, and in the Soviet Union some plants were set up in the eastern region towards the Pacific Coast.

Over time, iron and steel industries began to move to coastal areas, such as the steel industry in Japan’s Osaka-Kobe region and steel plants in Visakhapatnam, Ratnagiri, and coastal cities in the United States such as Cleveland, Detroit, and Chicago. There are following reasons for this:

  • Depleting coal resources on the mainland changed the economics of the cost of transporting raw materials versus the cost of transporting the finished product.
  • The export of steel and import of raw materials can be done easily near the ports.

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