SSS 2020: More steel, fewer workers will be needed in future
Thirty years from now, the global steel industry will likely use more briquetted iron products and scrap and hardly any steelworkers, executives said during the “Steel Industry 2050" panel at Fastmarkets’ 2020 Steel Success Strategies Online conference.
The majority of the panelists predicted that the consumption of steel will soar by 2050 - to as much as 4 billion tonnes per year, according to one estimate, from 1.87 billion tonnes in 2019.
While climate change and the desire to reduce greenhouse gas emissions pose production-cost challenges to steelmakers, the quest for carbon neutrality will also boost demand for their goods.
While steel production contributes an estimated 7% of carbon emissions, concrete is higher at 10% of emissions, Rod Beddows, senior adviser and co-founder of HCF International Advisers, said during the panel.
“That means, in my view, that steel will increase market share,” he said, estimating that steel demand will leap to 3.5-4 billion tonnes in 2050.
Renewable-energy infrastructure is more steel-intensive than the current fossil-fuel network, according to Marcel Genet, founder of Laplace Counseil.
One industry estimate calls for 3 million wind turbines by 2040, requiring perhaps 1.4 billion tonnes of steel.
Also likely to reduce steel’s carbon footprint is the increased usage of hot-briquetted iron and eventually cold-briquetted iron.
Beddows said that would be especially true when green hydrogen is widely adopted as a fuel source, potentially within 30 years.
The most efficient way for the steel industry to reduce its carbon dioxide impact is to recycle more scrap and make steel in electric-arc furnaces, Genet said.
“The old and obsolete blast furnace will continue to decline,” Genet said, adding that global steel demand could reach 2.4 billion tonnes per year by 2030.
Among the panelists, only World Steel Dynamics Inc managing partner Peter Marcus said global steel volumes would be roughly the same in 2050 as current levels. Two reasons for this are slower economic growth and less demand for oil extraction and large ships.
China’s modern steel industry will continue to threaten its competitors elsewhere and melt more scrap, and direct-reduced iron usage will more than double over that period, Marcus said.
Marcus expects steel companies to increasingly turn to hedging instruments. “They will be more involved in futures trading, which will smooth out their risk over time,” he said.
Beddows noted that much of the carbon-reducing initiatives in the steel industry will be driven by governments, sovereign wealth funds and iron ore companies. Rather than the current trend toward vertical integration, in 2050 he anticipates that ore miners and steelmakers will tend to be decoupled in the same way that bauxite providers and aluminium processors are currently separate.
He also noted that augmented intelligence and other automation will optimize all aspects of steel production by 2050.
That means there will be less incentive to move manufacturing to cheaper, developing nations “because low wages don’t count as much,” Marcus said.
Panel’s moderator John Lichtenstein, principal at Crucible Consulting, questioned how necessary people will be at that point. “We’re talking 30 years out. Are we even going to need people to run a steel company [on the production side?]” he asked.
“I don’t think so,” World Steel Dynamics chief executive officer Philipp Englin replied.