The steel industry in the future: obstacles, challenges & opportunities
SAIC Conference, Sandton, South Africa
Edwin Basson, 5 March 2013
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2
Five key messages for the global steel industry
KEY MESSAGE 1
KEY MESSAGE 2
KEY MESSAGE 3
Steel a key
driver of the
world’s
economy
Sustainable
steel
Steel is
everywhere in
your
life
2022
KEY MESSAGE 4
Safe,
innovative and
progressive
steel
KEY MESSAGE 5
Life Cycle
Assesment,
new solutions
for new times
3
Contents
 The environment in which we operate
 Sustainability
4
Global growth expected flat in 2013 but developing economies
outlook improving
Global GDP developments (%, Real 2005 USD billions)
2009
2010
EU27
-4.3
2.0
NAFTA
-3.2
2.6
S.America
-0.3
6.0
CIS
-6.8
4.9
Africa
2.7
4.7
Middle East
1.3
5.9
Asia
1.8
7.7
Global
-1.9
4.2
2012
-0.2
2.3
2.3
3.6
5.0
3.3
4.9
2.6
2013
0.1
1.9
3.3
3.6
4.4
2.2
4.7
2.5
Source: Global Insight (January 15, 2013) and worldsteel
 Advanced economies outlook weak with growth expected to slow to 1% in 2013

from 1.3% in 2012.
Developing economies outlook improving with growth expected up 4.8% in 2013
from 4.7% in 2012.
5
Developed market outlook remains challenging
1. Anaemic consumer demand:



Continued deleveraging - incremental income supports paying past debt at
the expense of current consumption.
Credit supply still tight while demand also weak.
Unemployment still elevated.
2. Government expenditure restraint:


High debt levels provide little room for fiscal easing.
Austerity measures reducing fiscal deficits.
3. Investment weak:



Weak capacity utilisation postpones need for additional investment.
Commercial buildings plagued by overcapacity.
Strong cash flows to support demand when confidence returns.
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Emerging markets drive steel demand at the margin
Structure of real GDP & Apparent steel use
Developed
Developing ex China
China
GDP
ASC
GDP
ASC
GDP
ASC
2000
78%
56%
18%
27%
3.6%
16%
2005
75%
40%
20%
26%
5.0%
33%
2010
70%
24%
22%
31%
7.6%
45%
2012
69%
23%
23%
32%
8.5%
45%
Source: Global Insight & worldsteel
Global apparent steel use (Billions of tonnes, finished)
1,6
Developing ex China
China
Developed
1,4
28%

1,2
1,0
45%
0,2
26%
0,4
16% 27%
0,6
56%
0,8

2012 another record year for
apparent steel use
China’s share of global demand
at peak levels
Source: worldsteel
0,0
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Developing regions more steel intensive in important use sectors
60%
Developing
Developed
50%
40%
30%
20%
10%
0%
Construction
Industrial goods
Consumer goods
Source: worldsteel
 Urbanisation trends in developing countries contribute to significantly higher
steel intensity vis a vis developed countries.
 While developing countries are less steel intensive in both industrial &
consumer goods.
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Urbanisation and real GDP per capita
Source: United Nations, worldsteel
 Despite growing income per capita in developing economies, high urbanisation rates in
some countries mean that ASU growth will be less vs countries with relatively lower
urbanisation rates.
9
Urbanisation trends indicate concentration to larger cities
Distribution of urban population by type of city:
1970
2010
Source: United Nations
 Urban population is concentrating in cities with population greater than 1 mln inhabitants
 Falling role of cities with population less than 500 thousand inhabitants
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Contents
 Economic outlook
 Sustainability
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Sustainable steel: at the heart of the green economy
Steel industry sustainability
13
Sustainability must apply over the life cycle of steel
- Not possible without supply chain collaboration
14
Increased sustainability requires collaboration throughout a product’s
life cycle
 Steel accounts for more than 50% of global steel production (>700Mt)
and is increasing annually
 Concrete intensive building, steel intensity = 12 – 30 kg/m2
 Steel intensive building, steel intensity = 50 – 80 kg/m2
 Collaboration of stakeholders throughout the phases of a product’s life
cycle is required due to:
 Shift in contributions of environmental impact between life cycle phases as
buildings become more efficient to operate
 Increasing amount of regulations requiring reductions in impacts of products
 Therefore need to make improvements in each of these phases:
 Design
 Production
 Use
 End-of-life recycling
15
Environmental impact: use phase often dominates
% contribution of each life cycle phase
Raw
Rawmaterials
materials
Material
Material
production
production
Manufacturing
Manufacturing
Use
Usephase
phase
End
Endof
oflife
life
 The use phase of products often has the greatest environmental impact
 Aim of regulations: to reduce use phase impacts
 Steel industry involvement to improve use phase
 Material production and end-of-life become more important
 Move to lighter weight, higher strength steels
Design requirements
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Steel in sustainable construction
 Reduced construction time with on-site erection of the steel frame: less
overhead costs during project construction.
 Structural steel frames can provide longer spans, thus offering columnfree spaces and flexibility in space planning.
 Steel may be recycled in its original or near-original state while concrete
can be reused mostly in a downgraded form such as filling material.
 Steel constructions can be designed for easy disassembly and reuse.
 More steel is recycled each year than all other materials combined,
including aluminium, paper and glass. >85%
 Steel is the only material that can be recycled over and over without ever
losing its quality.
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End of life evaluation could be a deciding factor
Tata Steel and BCSA
Concrete
–
Timber
–
Steel
Steel: Life Cycle Thinking
worldsteel.org