THE FUTURE OF STEEL INDUSTRY (products4steelmaking, steel, steelmaking, iron, metallurgy, engineering, technology)

1
THE FUTURE OF
STEEL INDUSTRY

BEGINNER LEVEL Author: Eng. Matteo Sporchia
Release date: July 28, 2019

Copyright – P4S – PRODUCTS 4 STEELMAKING
All Rights Reserved

2 Copyright – P4S – PRODUCTS 4 STEELMAKING – All Rights Reserved – Author: Eng. Matteo Sporchia
THE FUTURE OF STEEL INDUSTRY

SUMMARY

1. INTRODUCTION ………………………………..……………………………………….….. PAG. 3

2. SHARES OF WORLD STEEL PRODUCTION BY MAIN COUNTRIES ……... PAG. 4

3. STEEL PRODUCTION IN THE LAST DECADE ……………………………….…….. PAG. 7

4. STEEL DEMAND IN THE LAST DECADE …………………………………..…..….. PAG. 11

5. THE CHINESE STEEL BALANCE …………………………………………….…….…... PAG. 13

6. MAIN STEEL GROUP PRODUCERS …………………………………………….……. PAG. 15

7. WHAT TO EXPECT IN THE FUTURE …………………………………………………. PAG. 17


1. INTRODUCTION

There's no doubt, make predictions about the future of steel industry it's always close
to impossible. Many key factors have to be considered while foreseeing something
about this big elephant industry, remembering the macroeconomics aspects can
easily move things in one or the other directions.


2. SHARES OF WORLD STEEL PRODUCTION BY MAIN COUNTRIES
Let's see what's happened to the shares of steel production by the major countries in
the last century:
1.CHINA Since the 1980s, China has emerged as a major producer in a number of
heavy industries, including steel and aluminum. Chinese steel production growth
from 10% to 50% of the global total between 1990 and 2018;
2.EUROPEAN UNION The global share production of European Union has
consistently declined over most of the past 150 years, counting nowadays about
9% of the total worldwide production;


3.USA Share of steel production in the USA peaked in the early 1920s
and fell sharply thereafter. The USA currently accounts for less than 5% of global
steel production;
4.JAPAN The share of Japanese steel production continues to fall after reaching
over 15% of the global total in the 1970s counting nowadays about 5% of the
total worldwide production;
5.INDIA Along with Chinese, Indian production has increased in the last ten years
and today contributes about 6% of the worldwide production;
The result is that global steel production has shifted dramatically against the United
States, Europe and Japan and toward China and India over the last century and
particularly the last four decades.


3. STEEL PRODUCTION IN THE LAST DECADE
In the last decade total crude steel production jumped from about 1.342 ML TONS
(2008) to a 1.808 ML TONS (2018) with an increase of about 35%. Here below the
table and graphs with the total production (by year) divided by regions:


It's easy to come to the following conclusion:
In the last decade, world steel output increased of about 466 ML TONS, where 416
ML TONS is the total increase due to the Chinese steelmakers. That's means that
China totally driven the growth in production counting about 90% of the total one.
The remaining 10% is mainly due to the Indian steelmakers, while the other
countries had a decrease or just slow increase in the production:


4. STEEL DEMAND IN THE LAST DECADE
The worldwide steel demand in the last decade jumped from 1.219 ML TONS (2008)
to about 1.662 ML TONS (2018) with a total increase of about 36%. Steel demand has
increased in different regions of the world, especially in China, Europe, Middle East
and Africa. Here below a table with the steel demand divided by regions:


5. THE CHINESE STEEL BALANCE
As Chinese production account for about 50% of the total world steel production, the
first parameter that has to be considered to predict the future of steel industry is the
balance between the export and import of steel in and from China. As indicated in
the table here below it's simple to note that the high unbalance created in 2015 and
2016 (about 100 ML TONS/YEAR) have brought a relevant crisis in the steel sector
especially in Europe, Middle East and South America.


6. MAIN STEEL GROUPS PRODUCERS
Here below you can see the top ten steel producers (nowadays) and the first steel
producers by each country:


It's easy to note that the output of the first ten steel producers counts
about 25% of the total steel produced worldwide.

7. WHAT TO EXPECT IN THE FUTURE
To understand the future of steel industry several points have to be taken in account.
Some of them are summarized here below:
1) FUTURE GLOBAL STEEL DEMAND As indicated in the table above the increase of
global steel demand in the last decade was about 35%, which means about an
average of 3 to 4% increase every single year. If we go ahead in this way we can
foresee a total demand to be about 2.500-2.800 ML TONS of steel by 2030. The other


estimations are summarized in the table here below. Of course we've
to consider that China’s rapid ascent—which drove previous global demand—was a
unique phenomenon that is not going to be repeated in other countries. Based on
this statement someone expects a slow growth of steel demand of 1 to 2% per year;


2) FUTURE OF STEEL AS "PRODUCT" The long-term decline in overall steel intensity is
accelerating due to material substitution, shifts in design parameters and
steelmakers’ own success in producing lighter, stronger steels;
3) POTENTIAL REDUCTION OF CHINESE STEEL CAPACITY AND DEMAND Reductions in
China’s excess internal capacity could easily change the cards on the table. But this
hypothetical reduction has to be linked to the potential declining of domestic Chinese
steel demand. Someone predicts that an oversupply will remain over the next
decade. This will be mainly attributed to the resistance of China to cut production
levels as well as the declining demand across the world;


4) SHIFTING TO ELECTRICAL STEELMAKING Scale is important in the
industry—and even as electric-arc furnace (EAF) mini-mills have made inroads, the
pursuit of operating scale has continued. But so too has the development of
advanced, smaller scale configurations. The restricted incoming rules of the circular
economy and climate change will encourage the proliferation of reduced-scale plants
that are sized to match new low-carbon production processes and take advantage of
renewable energy sources;
5) EMERGING ECONOMIES Global steel demand over the next decade will mainly
depend on the emerging economies. However, economic conditions for the global
steel industry remain uncertain and challenging;


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THE FUTURE OF STEEL INDUSTRY (products4steelmaking, steel, steelmaking, iron, metallurgy, engineering, technology)

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THE FUTURE OF STEEL INDUSTRY (products4steelmaking, steel, steelmaking, iron, metallurgy, engineering, technology)