Covid-19 and the Steel Industry
Covid-19 and the Steel Industry
As many countries across the world begin to ease lockdown restrictions following the impact of Covid-19, there are many questions concerning the effect this period of uncertainty will have on global economies.
In a recent webinar titled “Economic Outlook for the Global Steel Industry” run by Steel University, Dr Edwin Basson, Director General of the World Steel Association, discussed the current and potential future impacts of this global crisis on the steel industry.
Dr Basson drew comparisons to the great number of parallels existing between the economic consequences of the current situation with Covid-19 and the global financial crisis of 2007/2008. Both events led to significant reductions in GDP – although throughout Covid-19, some manufacturing activity has been able to continue and the most significant effects have been, and continue to be, felt in the retail and hospitality industries. Whilst 2020 will undoubtedly be a difficult year for many sectors and economies with the potential for recession and a reduction in investment growth, there are signs these indicators could become positive as early as next year.
The result of such widespread global shutdown has had several effects on foundation industries such as steelmaking. There has been supply shock – supply chains have been disrupted, leading to bottlenecks in production processes, ships unable to dock and unload, and no drivers to convey lorry loads of supplies to and from factories. Additionally, there has been demand shock, especially for businesses which supply the construction, automotive and machine building sectors, who suddenly no longer require the volumes of materials expected. Overall, the volatile nature of the financial markets has led to large levels of uncertainty across the globe.
This unusual situation has led to potential opportunities for change in industries; with so many restrictions currently on movement, it is possible we may see the transformation of some supply chains, becoming shorter and more regionalised. This may initially lead to increased costs, but in the long term could reduce material transportation distances, decreasing carbon footprints of supply chains. Many regions could become more self-sufficient; in the UK, this will help prove the importance of retaining foundation industry practices such as steelmaking to government officials and the wider public.
To achieve this, and further change how essential industries such as steel manufacture is viewed in the UK, projects like SUSTAIN are key to identifying, developing, and implementing cleaner, greener, smarter solutions for a sustainable steel future. Technologies such as the use of hydrogen for the reduction of iron ore are under investigation in this Hub, and whilst this process still requires significant work to scale up, it is a major step in the right direction. It is also essential to consider how the volumes of hydrogen required can be produced in a sustainable manner for large scale operations. Other research topics, such as CCUS (Carbon Capture, Utilisation and Storage) are becoming more widespread, and adopted in industry as these technologies mature. To make projects such as these a success, the findings from these programmes must be shared throughout the industry, to effect real change in the sustainability of steelmaking in the UK. These positive changes must be used to alter how the public perceive foundation industries such as steelmaking; there is a lack of knowledge and understanding around the essential role steel plays in maintaining our current standards of living, from the buildings we live and work in to the cars, trains and planes we rely on for transport.
SUSTAIN not only encompasses projects on Carbon Neutral Iron and Steelmaking, but also considers how steel plants can become smarter. Using Industry 4.0 to identify issues with products as early as possible in the manufacturing process will reduce waste, energy costs and plant downtime. There are also opportunities to find solutions to re-use excess heat from processes as part of the Smart Steel Processing challenge this Hub also addresses. Steel is a highly suitable material for recycling and reusing on multiple occasions, which presents clear possibilities to develop and integrate the circular economy model into the future of the UK steel industry.
Perhaps Covid-19, despite the challenges the steel industry has faced over this period, will provide us with the opportunity to step back and appreciate how fortunate we are to maintain such a critical industrial process in the UK, and work together to ensure its green future.
The steelTalk Webinar hosted by Steel University was originally broadcast on 17th June 2020 and is available to view on demand here.
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Headline image by Miroslava Chrienova from Pixabay
