Challenges and opportunities in the steel industry

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Every industry has its own perks and challenges. When it comes to the steel industry, you face many challenges to overcome in order to manufacture or even recycle steel. Steel industry or steel per se has huge demand all over the globe which makes it all the more difficult to fulfil that need. There are many countries who export steel out which, China exports 50% of the world’s steel requirement.

Today, we will talk about major challenges and opportunities in the steel industry. First, we will discuss challenges which provide opportunities to grow. Some of the major challenges are:

• Growth in Demand

With the focus of many countries on infrastructure and development, the global requirement of steel use will certainly increase exponentially over the years. Many reasons like unresolved structural issues, political instability, volatile financial markets and more decide the requirement of steel over the years. 

Steel consumption is expected to grow steadily over the coming years and it is a noticeable fact that that this expectation might go off the charts. Steel manufacturers or steel industry will be able to fulfil this growing requirement or not can only be speculation. We have to wait and watch to see how they even try to fulfill these requirements.

• Depletion of high-grade raw materials – Recycling - not an option?

The high rate of production of steel within the last decade has caused the depletion of high-grade raw materials. This leads to manufacturers using low-grade materials. Using low-grade materials is harmful to the environment in many ways since energy consumption will be more which leads to an increase in the release of greenhouse gases. 

Recycling is an option since you can extract steel apart from non-metallic components likes flange guard or flange spray shield which are most commonly used in steel piping system to avoid leaks. Both of these guards are used as a safety measure in steel piping system.

• Solid Waste Management

Manufacturing of steel produces a large amount of solid waste called slug while processing materials through various processes. The solid waste will contain valuable materials which can be extracted and reused. 

But, steel manufacturers never realize this fact and waste will not be managed losing out on such valuable commodity. Research is going on to reduce waste produced during the process and also regarding ways to manage solid waste in order to extract needed materials.

• Environmental Challenge

Last but, definitely not the least – environmental challenge is the most important one to consider. I’m talking about in the end since it needs to be explained thoroughly and there are many types of research going on all over the globe in order to reduce the release of greenhouse gases during the production of steel. 

Several countries have even imposed laws so that the steel industry can follow the protocol to restrict the amount of GHGs (especially CO2) emitted via industrial sectors. ULCOS – Ultra Low CO2 Steelmaking is in the research and development phase where a consortium of 46 European countries and 15 European organizations are working solely for one purpose. 

Finding opportunities to produce steel using methods that produce 50% less CO2 emission is the main mission.

Some of the concepts these people are working on are:

Carbon Capture and Store (CCS)

This concept states that90% of the CO2 emissions are captured and prevented from being released into the environment. However, the collection of CO2 is compressed under high pressure, converted into a liquid and injected into a rock formation site for permanent underground storage. The only issue is to find the land to store the CO2

Hlsarna with CCS

Based on bath-smelting technology, Hlsarna is a new iron-making method. The method directly melts coals and iron into a reactor. The coal required for this process is less which leads to less emission of CO2 and less energy consumption.

Electrolysis

Replacing the BF method with the Electrolysis can prevent tons of CO2 emissions. In Electrolysis, the Ionization occurs when a high current is passed through the iron ore which is dissolved in a solvent at high temperature. Elemental iron is deposited near the electrode in the reactor. This is a completely different approach which is still in the lab stages.

 Hydrogen instead of Carbon

Hydrogen acts as an excellent reducing agent replacing coal in order to completely remove the concept of CO2 emissions. This method provides a high chance of nullifying the GHGs released into the atmosphere. Hydrogen reduces iron oxide to iron by converting itself from H2O absorbing the Oxide. It releases water vapour instead of CO2.

Opportunities

There are many benefits and opportunities for the steel industry. Many countries follow similar protocol which leads to the belief that they can make quite a bit of profit and still trade in order to gain more. Some of the most common opportunities are:

• Trade and Investment

• Bilateral Trade Agreements

• Export Support Mechanisms

• Local Content Levels

• Trade Finance

These are some of the self-explanatory opportunities that you cannot miss out in a steel industry. You need to explore and exploit the opportunities that you see instantly. It could be something minor or even something major which could bring in a huge profit. China is the largest manufacturer of Steel since it has increased its production exponentially within the last decade. 

China has made large disruptions in the steel industry trading or even import/export due to its export boom within a short span of time. Many laws have been passed and in recent times, a large amount of import taxes for steel has been posted in many countries. This is one of the good things done by their respective government.

Conclusion

The threat of increasing demand and import/export is always there. But, this threat is being overcome slowly since the production of steel is not only China’s forte. Many other African countries abundant in high-grade resources are yet to be touched. Some of the main challenges and opportunities have been presented to you, hope you agree to the same.