Three Megatrends Shaping The Future Of Steel Industry

By: Team Industry Outlook | Monday, 03 February 2020

Steel has become a vital component in the
manufacturing industry after the industrial revolution which is followed by rapid urbanization. The demand for steel across the globe is expected to reach 2.0 billion tons by 2035, growing at a CAGR of 1.4 percent, according to Accenture’s report present to OECD. “In my view, a robust steel industry is a must for a nation aiming for top notch benchmark of economy. The Committee of G20 nations which works with an objective of global economic stability and sustainable growth focuses on the growth of the national steel industry. To make this industry flourishing, the best way is to be quick and capitalize on the time, with smart investments aimed at enhancing the performance and align to meet the new needs,” says Rayed Abdullah Al-Ajaji, Chairman of NCSI and CEO of UNICOIL. As the demand for steel is expected to increase year by year, let us examine some of trend shaping the steel industry.

Shift towards Privatization
Privatization of industries is slowly becoming a norm today for governments across the globe to attract foreign investments, and steel industry is no exception to this. In 1980’s more than 60 percent of the steel producing companies in the world were owned by governments, currently only 30 to 40 percent of firms are under governments’ control. In china alone, the private ownership increased from less than 5 percent in 1990’s to 15 percent in 2016. With this massive privatization of steel industries, as of 2017 China alone contributes to 49 percent of world’s steel production. India also, under ‘Make in India’ is making attempts to privatize the steel industry so as to meet the future needs.

Increasing Utilization of Scrap Iron
Today, with growing concerns over conserving natural resources, counties across the world are emphasizing the reuse of scrap iron in order to decrease the carbon footprint. This helps to improve the ecological balance by minimizing the requirement of iron ore extraction for the process generation of steel. This eventually decreases the emission of carbon dioxide and water utilization, resulting in energy savings and decreased air pollution. Hence, scrap iron has become a preferred raw material for steel producing companies.

Rise of Pre-engineered Buildings
Pre-engineered buildings which save up to 50 percent of time and cost when compared to traditional building construction methods are gaining traction these days. Wide range of customization options possible with welding of steel bars that are typically not available with traditional buildings is also another significant factor contributing to the rise of pre-engineered buildings.