Blog: Message from the Director General

Message from the Director General

Edwin Basson, Director General, worldsteel

29 January 2019

It is now a decade after the financial crises, and yet as we begin 2019 a number of important issues remain either unresolved or a matter for potential instability and conflict. US/China trade negotiations, Brexit, population migration and border issues (EU and US), climate change, China’s economic growth, Middle East conflict, just to name a few. This year will hopefully provide direction on how these important issues could be resolved.

While many materials claim to either enable or support the sustainability of modern society, few can make this claim for as long a period, or with a similar diversity of applications as steel. To maintain this position will not be easy. Requirements coming from wider society are ever more exacting, competing materials are improving, and new high performing materials are being developed continuously.

On the immediate horizon we have two specific challenges to be addressed.

The first is climate change, where steel has an important contribution to make. The steel industry produced around 1.8 billion tonnes in 2018, 70% of which is new steel produced from raw materials. CO2 emitted during this production is estimated to be between 7% and 9% of the global total.

At the same time, steel plays a critical role in enabling the emissions reductions outlined in the Paris agreement. Decarbonisation is steel intensive, whether we are talking about renewable energy, mass transport, smart cities or electrification.

The membership of the World Steel Association, which represents more than 80% of global steel production, continues to find ways to drive efficiency in energy use and product design. We are working on an exciting new programme which we hope to launch very soon. Watch this space!

The second challenge is the growing focus on a circular approach in production – the so-called circular economy – as a basis for economic policy making. This could potentially have an important impact on all metals, but steel as a material is inherently reusable and recyclable and will undoubtedly experience an impact from circular economic policies. After all, not many materials can claim to be key to a reduce/reuse, remanufacture, recycle world.

To remain a material of choice in the development story of modern society, we in the steel industry have much to do to explain our importance to future success.

Add your comment here:

  • 1

    For several years I have expected Chinese steel production to reach a natural peak, level off and adjust downward. To my awe I have witnessed the exact opposite, 2018 levels showing the highest figures ever. That single country produces more steel than the rest of the world combined. Such strong absolute & relative figures and growth rates over so many consecutive years leave me wondering where demand for Chinese steel is coming from. Exports do not amount to very much in % terms. Does the construction boom in the country proceed unabated requiring ever more steel? Which sectors are using steel the most? Predictably, when is domestic demand expected to taper off?

    avatarCarlos Filipe Miranda CollacoFeb 8, 2019 5:08:53 PMReply

  • 2

    Thank you for your comment, Carlos. The steel using sectors in China account for broadly the same percentages of steel demand as the steel using sectors globally i.e. building and infrastructure accounts for about 50% of steel demand, mechanical equipment accounts for about 15% of steel demand etc. Although we have seen nominal Chinese steel demand increasing by apparently large amounts in the last few years, real demand increases have been much more modest. China has been closing outdated induction furnace capacity, meaning that a lot of demand previously satisfied by these small furnaces was not captured in official statistics but has now moved on to the books. In any case, we do expect demand to level off in the coming years. According to our most recent short range outlook (SRO), growth in Chinese steel demand will be 0% this year.

    avatarworldsteelMar 14, 2019 10:04:48 AMReply

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