Remarks by Kosei Shindo, worldsteel Chairman 2017/2018 and Chief Representative, NSSMC at worldsteel's General Assembly in Tokyo, Japan.
16 October 2018
Good morning, ladies and gentlemen. I am Kosei Shindo, the Chairman of the World Steel Association.
I would like to thank you all for attending the worldsteel General Assembly 2018 from across the world today. I also appreciate our guests that have taken time out of their busy schedule for us in order to give a speech or participate in the panel discussions at this General Assembly.
In Japan, the Rugby World Cup will be held in 2019 and also the Tokyo Olympic and Paralympic Games will be held in 2020. I am glad to hold our General Assembly here in Tokyo prior to these big events.
First of all, I would like to thank all the staff of worldsteel who engaged in preparations for this General Assembly and I, as the Chairman of the World Steel Association, would also like to thank all the staff of the Japan Iron and Steel Federation and Japanese steel manufacturers who carefully prepared for hosting this assembly.
Now, let me say a few words on the opening of the World Steel Association General Assembly 2018.
The business environment surrounding the world steel industry is favourable in general. Demand for steel is growing gradually and continuously against the backdrop of a strong world economy. However, there are many uncertainties in the macroeconomic environment, such as increasing world trade tensions or the result of the UK’s negotiations for the withdrawal from the EU. I am paying close attention to how these risks will affect future trends.
Looking at our customer industries, it could be said that they are in a time of huge change. In the automotive industry, which is our major customer for example, technological innovations are being introduced, including the development of electric vehicles and automated driving technology. The steel industry must appropriately and rapidly respond to such changes through our innovations by applying dramatically progressing information technologies, such as big data analysis or artificial intelligence, as well as developing “multi-material” technology and so on. Also, the high target for the reduction of CO2 emissions which was set as a measure against global warming in the Paris Agreement is a very big challenge for the steel industry.
We, the World Steel Association, must appropriately respond to these common challenges by gathering the wisdom of steel manufacturers across the world. Today, I would like to focus on several important issues and speak about the direction that we are taking and should take in the future to resolve the issues.
First, the task of the Global Forum on Steel Excess Capacity was set up in 2016. Under the initiative of this forum chaired by Germany and Argentina and with the accumulated efforts of each country, the transparency of the steel supply-demand environment has improved in the past two years following the establishment of the Global Forum. The multilateral approach by the Global Forum to exchange information on crude steel capacity developments and government policies affecting excess capacity, including market-distorting subsidies and other government support measures, have been effective to date. I highly appreciate that the Ministerial meetings held in September 2018 agreed to them. I also hope for further progress through the smooth implementation of agreements next year under Japan’s chairmanship. Although the forum reaches the initially-set expiry in 2019, the majority of worldsteel members would like to see the Global Forum process continued after the expiration of the first three year term. This continuation with its contribution to building free and fair steel trade will help to ensure the sustainable development of the steel industry. I appreciate your understanding to release these messages as worldsteel chairman’s statement.
In the meantime, trade tensions are increasing around the world in the wake of the recent invocation of Article 232 of the Trade Expansion Act by the United States. The world steel industry must pay close attention not only to the direct impact of the invocation but also to the indirect impact of the expanded application to automobiles and related parts, as well as to the chilling effects on trade and investment caused by trade restrictions imposed by each country as countermeasures. I reaffirm that the fair and free trade system has served as the basis for the development of the world economy and hope that such trade issues will be properly handled.
The second issue is how to tackle global warming.
worldsteel has analysed the impact of global warming issues on the steel industry and discussed the direction that the industry should take. Currently, we are working to improve energy efficiency and reduce CO2 emissions by applying top 15%-level technologies that lead the world’s steel industry to the members of worldsteel. It is also important to promote educational activities from the perspective of Life Cycle Assessment in order to improve the image of “steel as an environmentally friendly material.”
To take the next step, “innovation” is important. During this General Assembly, we will have panel discussions related to such innovation in the steel industry. I expect many opinions will be actively exchanged among intellectuals.
The third issue is the analysis of long-term forecasts for steel supply-demand and initiatives for new market development based on these forecasts. Last year, worldsteel compiled a future forecast analysis of the steel industry, setting 2035 as the goal, although there are many uncertainties that may affect the supply and demand for steel. I believe that producing such long-term supply-demand forecasts will contribute to the future stabilisation of the steel product market. We are also working actively on the research of various demand areas, such as establishing “constructsteel”, which is designed for research of construction market development, in addition to the future trend survey of the automotive industry that has been conducted by WorldAutoSteel. We will continue to share beneficial knowledge and promote research that will contribute to the growth of the steel industry.
Today, I mentioned part of a wide range of initiatives of the World Steel Association. We will continue to actively develop activities that are beneficial to member companies and make efforts to support the development of the world steel industry.
Lastly, I would like to conclude my speech in the hope that this two-day assembly will be very meaningful for all of you.