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94

Towards Closed-Loop System in the Steel Industry  다운로드

Dr Jun H. GOH, Chief Economist, POSCO Research Institute attended worldsteel's Circular Economy Conference in September 2018 and looked at how we could work towards a closed-loop system in the steel industry. The presentation file is attached and the full version of the streaming video is found at: http://www.posri.re.kr/ko/board/content/15590 Related article: http://www.posri.re.kr/ko/board/section_content/6998  

Jun H. Goh 2019.02.12 1,228
93

Asian Steel Watch Vol. 6 Press Release (December 2018)  다운로드

POSCO Research Institute (POSRI) released the 6th issue of Asian Steel Watch (ASW) in December 2018. This bi-annual English journal is specialized in the Asian steel industry and market.   Asian Steel Watch provides insightful, in-depth analysis of the Asian steel market. In this issue, Asian Steel Watch sheds light on global value chains under the On the Cover section titled, “The Steel Industry in the Context of Global Value Chains.” It features interview with OECD Steel Committee Chair Lieven Top and Special Report on Ten Years after the Financial Crisis, Where is the Global Economy Headed? by POSRI. The Featured Article section deals with the closed-loop system for the steel industry and steel industry policies under the Xi Jinping Administration. Finally, the Market Trend and Analysis section covers The China Shock Revisited: Shifts in the Scrap Market Dynamics and Their Ramifications.   For the full version, please visit POSRI website (https://www.posri.re.kr/eng/) Asian Steel Watch Vol.6 covers the following issues in detail:   Interview with OECD Steel Committee Chair Lieven Top, “Challenges Facing the Global Steel Industry and the Way Forward” Mr. Lieven Top, Chair of the OECD Steel Committee talked to Asian Steel Watch about the steel committee and global steel industry. 1) History, organization, role, and major outcomes of the OECD Steel Committee The OECD Steel Committee celebrates this year its 40th anniversary! The objective of the Steel Committee is supporting the viability of the steel industry. Means to realize this are policies that reduce market distortions and promote competitive and open markets for steel. The Steel Committee has become over the decades the central platform for multilateral steel problems to be discussed. The Committee mandate calls on governments to work together in order to: 1) reduce trade barriers; 2) deal with crisis situations in close consultation with trading partners; 3) facilitate necessary structural adaptations that reduce pressures for trade; 4) actions and promote rational allocation of productive resources; 5) avoid encouraging economically unjustified investments; 6) ensure that state-owned enterprises act in accordance with market principles; and 7) facilitate multilateral co-operation consistent with the need to maintain competition. 2) Steel overcapacity as its key agenda item Excess capacity remains certainly the key challenge for the global steel industry. Considering limited expectations of demand growth, overcapacity persists at near-record levels of 540 Mt. This is further fuelled by increases in capacity in 2018, whose 2% growth brings current global steelmaking capacity up to 2291 Mt. OECD data show that global steelmaking capacity could increase by 1.6% between 2019 and 2021 in the absence of closures. On the medium and longer term (2035), very slow growth is further expected for steel consumption. This means that unavoidably important further capacity closures will be needed to approach a market balance. 3) The spread of protectionism Steel trade continues to decline amidst increasing trade actions in the global steel market. Global steel exports decreased by 7.9% in the first quarter of 2018 compared to the same period in 2017. Global imports continued to decrease in 2018, falling by 6.6% in the first quarter of the year compared to the same period in 2017. Aside of close monitoring, steps are needed in the right international fora like the WTO, to evolve towards a sustainable international trade, which is in the long term interest of the whole of the steel sector. 4) Challenge of climate change for steel companies Steel companies are confronted with different aspects of mitigation and of adaptation. Agreement of Paris and consecutive policy on different levels causes or stimulates further decisions focused on increasing energy efficiency, adapting used energy mix, and other emission reduction measures. There is also the more recent phenomenon of growing direct impact on the operation of companies and their employees by several climate change effects. If appropriately designed, there can be potential double dividends, supported by policy making. 5) Prospect for the global steel industry Demand growth next year decelerates further under 1%, and will remain slow on the longer term. It is the sum of a number of underlying, interrelated effects of economical growth and other interrelated factors influencing demand in very different ways, like the evolution of consumption patterns, aging population, the rise of the circular economy concept, and competing products. This illustrates the permanent challenge for forecasters integrating these elements to improve their models. 6) Development of the steel industry Working together in international institutions like the OECD or the WTO remains a fundamental pillar. These are the fora where governments can work together in a multilateral way based on rules. The steel industry will certainly benefit from authorities learning from each other’s experiences how to address challenges as reductions of capacity, climate objectives or digitalization.   [On The Cover] “The Steel Industry in the Context of Global Value Chains.”  Global Value Chains: A Framework for Analyzing the Steel Industry GVC develops when the influence of a value chain transcends the borders of a country and spreads into cross-country activities. GVC refers to the fragmentation and decentralization of production processes into networks of vertically and horizontally intertwined countries, industries, and enterprises, as well as the subsequent value-added activities. Global steelmakers are targeting emerging markets and focusing on an expansion of value-added products. Given the international fragmented production structure, it is hard to trace value-added contributions because of this double counting issue. To address this issue, exports are divided into domestic value added absorbed abroad (DVA), domestic value added returned home (RDV), and foreign value added (FVA). Steel Global Value Chains and Sub-sectorial Comparative Advantage This note examines the role of Global Value Chains (GVCs) in the context of the steel sector. GVCs, a prevailing phenomenon in the globalised modern world, are characterised by the interaction of domestic value chains across different economies for the production of a certain good. Input-Output (I-O) analysis represents a novel methodological framework that provides a better understanding of the role played by different types of inputs in the generation of comparative advantages. Indicators constructed through I-O data have the potential to shed new light on the intricacies of modern steel global value chains and on the generation of comparative advantage at sub-sectorial level compared to standard measures.   Industrialization, GVC, and Steel Demand This article examines the industrialization prospects of developing countries and their implication for steel demand in light of the GVC evolution. There are some reasons to doubt that the traditional idea about industrialization and its impact on steel demand might have been altered due to a global value chain (GVC) in the manufacturing sector. Being incorporated into a global supply chain paves the way for a fast-track industrialization for developing economies with lower domestic capital requirements. However, in the case of industrialization through GVC, industrial development might be limited to a narrow range of sectors that are integrated into GVC and spillover into other industries is likely to be limited. Premature deindustrialization is a phenomenon, in which developing countries have experienced a decreasing share of manufacturing in terms of either employment or GDP much before reaching the living standards of developed countries. It seems that only rather scarce opportunities are left for developing countries to achieve a full-scale industrialization with own supply chains. Therefore steel demand potential for late-developing countries will be limited compared to early industrializers. Export Competitiveness and the Global Value Chains for the Korean Steel Industry This articles study Korean steel trade by applying the decomposition of value-added exports suggested by Wang, Wei, and Zhu (WWZ, 2013). The Korean steel industry’s GVC participation is higher than construction and services as it has high forward and backward effects and highly depends on raw materials imports. Korea rapidly participated in GVCs during 2000-2012 by producing offshore and importing low-priced Chinese steel for consumption at home or re-export. However, since 2012, GVCs have weakened due to rising global protectionism, the shift to domestic demand-driven structures in some Asian economies, and the narrowing production cost gap between developed and developing countries.   (Special Report) Dr. Jun H. Goh, Executive Vice President of POSCO Research Institute and other two experts conduct in-depth analysis on “Ten Years after the Financial Crisis, Where is the Global Economy Headed?” Ten years after the financial crisis, the global economy will face four major changes: excess debt, sluggish real sectors, the G2 imbalance, and low productivity, and demographic onus, triggering shifts in global finance, the real economy, industry, and trade. The four changes are: 1) Excess debt and financial distress: Debt-dependent growth will face limitations with the end of the low interest rate era. Global interest rates will inevitably rise and the related risk will grow for heavily-indebted countries; 2) New normal of structural low growth: Chronic demand shortfalls and productivity decline will diminish growth. Structural low growth in the global economy will become a new normal; 3) Manufacturing margin squeeze and evolving industrial ecosystem: With the deepening margin squeeze, the ecosystem is rapidly evolving to a digital-based version and smart technology-based big business is anticipated to rise; 4) Neo-protectionism: The era of neo-protectionism has come with the rise of nationalism and higher trade barriers. The ongoing US-China trade war is a hegemonic struggle that is highly likely to persist. - The changes in the global economy are not basically assumed in a crisis scenario. However, given the current global economic conditions, another crisis cannot be ruled out. One plausible scenario would be a G2-led economic crisis in the next couple of years. - Three economic variables—interest rates, foreign exchange rates, and oil prices—will have high volatility and stabilize over the medium-to long-term. Enterprises should pursue strengthened risk management and a prudential approach to new business and major investment. However, as conventional business opportunities are integrated with ICT, the smart infrastructure market in emerging economies will continue to grow. Using joint research with global enterprises, it will be necessary to create new business opportunities.  (Featured Articles) 1) Towards a Closed-loop System for the Steel Industry, 2) Steel Industry Policies under the Xi Jinping Administration and Their Implications  Towards a Closed-loop System for the Steel Industry The Fourth Industrial Revolution is expected to trigger fundamental changes in the way we produce and consume goods and resources, accelerating the transition to a circular economy. Steel companies need to understand their strong and weak points and seek ways to address challenges for improving circularity. Recently, steel companies have begun to recognize the impact of value chains and implement various business practices and models. When responding to challenges and opportunities in the circular economy, there are three key areas of focus: process innovation; product innovation; and creating a ‘closed-loop platform.’ In the due course to reach the circular economy era, steelmakers will naturally become more innovative in green technology that will generate unimagined circular business opportunities as well. Steel Industry Policies under the Xi Jinping Administration and Their Implications With the advent of the first term of the Xi Jinping Administration in May’13, the Chinese steel industry faced challenges with the rising number of steel company declaring bankruptcy amid plummeting demand, supply glut, and cost increase. Fully recognizing the severity of the situation, the Chinese government prioritized the closure of plants producing low-quality steel from scrap (ditiaogang) and initiated a sweeping restructuring. Steel policy direction during Xi’s second term (Mar. 2018 – Feb. 2023) includes the scaling-up of steelmakers, higher quality products, and smart & green manufacturing, and globalization under continuous capacity control. As the Chinese steel industry will be upgraded in terms of quality and greatly impact the global steel industry, the global steel industry must prepare for such changes.   (Market Trend and Analysis) The China Shock Revisited: Shifts in the Scrap Market Dynamics and Their Ramifications China’s steel scrap consumption totaled 100.1 Mt in 2016 and China exported 2.2 Mt of steel scrap in 2017. Despite China’s power in the global steel market, its standing in the steel scrap market is minimal. EAF represented only 5.2% of Chinese crude steel production, far lower than the global average of 26%. With the closure of ditiaogang facilities in 2017, the Chinese steel scrap market is tumbling, as evidenced by the surge of China’s scrap exports from 1,000 tonnes in 2016 to 2.2 Mt in 2017. With the closure of 140 Mt capacity of ditaiogang, low-quality steel made from scrap metal, approximately 70 Mt of unrecorded scrap transactions have revealed, lead to price decline and export increase. An analysis of possible long-term and structural changes to the Chinese steel scrap market shows that steel scrap generation is expected to surge and overflow after 2025. Chinese steel scrap supply will swell from 170 Mt in 2017 to 310 Mt in 2030, and Chinese scrap consumption is expected to mark 165 Mt in 2017 and 260 Mt by 2030. In this case, the scrap supply glut could reach 17 Mt in 2020 and 50 Mt of excess scrap supply will be added after 2025. With the rise of scrap supply, there will be an increasing number of small EAFs across China, even in inland China. China will raise its self-sufficiency rate in raw materials supply and could mirror the US structure. By 2025, the shock from Chinese steel in the 2000s will be revisited with the impact of Chinese steel scrap.   Notes to Editors:   POSCO Research Institute (POSRI) is a leading research institute headquartered in Seoul, Korea. Established in 1994, it offers research and consulting especially focusing on steel. However, its research areas are not confined to steel. POSRI conducts research in various fields, including the economy, steel-consuming industries, business, materials, energy, and the environment. POSRI publishes Asian Steel Watch, a bi-annual English journal specialized in the Asian steel industry and market, and Chindia Plus, a bi-monthly Korean journal specialized in China, India and other Asian countries.

Cheol-Ho Chung,Sojin Yoon 2018.12.31 1,289
92

The China Shock Revisited: Shifts in the Scrap Market Dynamics and Their Ramifications  다운로드

∙ China’s steel scrap consumption totaled 100.1 Mt in 2016 and China exported 2.2 Mt of steel scrap in 2017. Despite China’s power in the global steel market, its standing in the scrap market is minimal. - EAF represented only 5.2% of Chinese crude steel production, far lower than the global average of 26%. ∙ With the closure of ditiaogang facilities in 2017, the Chinese steel scrap market is tumbling, as evidenced by the surge of China’s scrap exports from 1,000 tonnes in 2016 to 2.2 Mt in 2017. - With the closure of 140 Mt capacity of ditaiogang, low-quality steel made from scrap metal, approximately 70 Mt of unrecorded scrap transactions have revealed, lead to price decline and export increase. ∙ An analysis of possible long-term and structural changes to the Chinese steel scrap market shows that steel scrap generation is expected to surge and overflow after 2025. - Chinese steel scrap supply will swell from 170 Mt in 2017 to 310 Mt in 2030, and Chinese scrap consumption is expected to mark 165 Mt in 2017 and 260 Mt by 2030. In this case, the scrap supply glut could reach 17 Mt in 2020 and 50 Mt of excess scrap supply will be added after 2025. ∙ With the rise of scrap supply, there will be an increasing number of small EAFs across China, even in inland China. China will raise its self-sufficiency rate in raw materials supply and could mirror the US structure. - By 2025, the shock from Chinese steel in the 2000s will be revisited with the impact of Chinese steel scrap.

Sang-Hyung Shim 2018.12.28 1,411
91

Steel Industry Policies under the Xi Jinping Administration and Their Implicatio  다운로드

With the advent of the first term of the Xi Jinping Administration in May’13, the Chinese steel industry faced challenges with the rising number of steel company declaring bankruptcy amid plummeting demand, supply glut, and cost increase. Fully recognizing the severity of the situation, the Chinese government prioritized the closure of plants producing low-quality steel from scrap (ditiaogang) and initiated a sweeping restructuring. Steel policy direction during Xi’s second term (Mar. 2018 – Feb. 2023) includes the scaling-up of steelmakers, higher quality products, and smart & green manufacturing, and globalization under continuous capacity control. As the Chinese steel industry will be upgraded in terms of quality and greatly impact the global steel industry, the global steel industry must prepare for such changes.

Chang-Do Kim 2018.12.28 1,175
90

Towards a Closed-loop System for the Steel Industry  다운로드

The Fourth Industrial Revolution is expected to trigger fundamental changes in the way we produce and consume goods and resources, accelerating the transition to a circular economy. Steel companies need to understand their strong and weak points and seek ways to address challenges for improving circularity. Recently, steel companies have begun to recognize the impact of value chains and implement various business practices and models. When responding to challenges and opportunities in the circular economy, there are three key areas of focus: process innovation; product innovation; and creating a ‘closed-loop platform.’ In the due course to reach the circular economy era, steelmakers will naturally become more innovative in green technology that will generate unimagined circular business opportunities as well.

Jun H. Goh,Yoon-Jung Chin 2018.12.28 1,299
89

Ten Years after the Financial Crisis, Where is the Global Economy Headed?  다운로드

∙ Ten years after the financial crisis, the global economy will face four major changes: excess debt, sluggish real sectors, the G2 imbalance, and low productivity, and demographic onus, triggering shifts in global finance, the real economy, industry, and trade. The four changes are: 1) Excess debt and financial distress: Debt-dependent growth will face limitations with the end of the low interest rate era. Global interest rates will inevitably rise and the related risk will grow for heavily-indebted countries; 2) New normal of structural low growth: Chronic demand shortfalls and productivity decline will diminish growth. Structural low growth in the global economy will become a new normal; 3) Manufacturing margin squeeze and evolving industrial ecosystem: With the deepening margin squeeze, the ecosystem is rapidly evolving to a digital-based version and smart technology-based big business is anticipated to rise; 4) Neo-protectionism: The era of neo-protectionism has come with the rise of nationalism and higher trade barriers. The ongoing US-China trade war is a hegemonic struggle that is highly likely to persist. - The changes in the global economy are not basically assumed in a crisis scenario. However, given the current global economic conditions, another crisis cannot be ruled out. One plausible scenario would be a G2-led economic crisis in the next couple of years. - Three economic variables—interest rates, foreign exchange rates, and oil prices—will have high volatility and stabilize over the medium-to long-term. ∙ Enterprises should pursue strengthened risk management and a prudential approach to new business and major investment. However, as conventional business opportunities are integrated with ICT, the smart infrastructure market in emerging economies will continue to grow. Using joint research with global enterprises, it will be necessary to create new business opportunities.

Jun H. Goh,Cheol-Ho Chung,Dongyong Choi 2018.12.28 1,680
88

[Interview] Challenges Facing the Global Steel Industry and the Way Forward  다운로드

Lieven Top Chair, OECD Steel Committee Mr. Lieven Top studied economics and political sciences at the Universities of Ghent and Padova. From 2004, he worked as advisor in the political cabinet of various Flemish Ministers of Energy and Environment. He was responsible for the design of national climate policy plans and CO² allocation plans and pioneered in Europe on closing of emission allowance contracts, including with World Bank and the Asian Development Bank. Since 2010, he has been working in the Flemish Department of Economy, Sciences and Innovation. As Director Climate and Industry, he supervises the combination of future European or regional climate rules and their potential impact on competitiveness. Also possible trade distortions and Brexit are points of attention. He also designs and coordinates multilateral programs for energy-intensive industrial sectors. Since 2017, he has been serving as the Chair of the OECD Steel Committee.

Lieven Top 2018.12.28 1,358
87

The Steel Industry in the Context of Global Value Chains  다운로드

1) Global Value Chains: A Framework for Analyzing the Steel Industry  2) Steel Global Value Chains and Sub-sectorial Comparative Advantage  3) Industrialization, GVC, and Steel Demand  4) Export Competitiveness and the Global Value Chains for the Korean Steel Industry 

Ki-Yong Jeon,Ji-Mi Chu,Nae-hee Han,Gianpiero Mattera,Eldar Askerov 2018.12.28 1,360
86

Asian Steel Watch vol. 5 Press Release (June 2017)  다운로드

POSCO Research Institute (POSRI) released the 5th issue of Asian Steel Watch (ASW). This bi-annual English journal is specialized in the Asian steel industry and market.   Asian Steel Watch provides insightful, in-depth analysis of the Asian steel market. In this issue, Asian Steel Watch sheds light on the circular economy under the On the Cover section titled, “Towards The Circular Economy: What It Means to the Steel Industry.” It features interview with HBIS Group Chairman Yu Yong and Special Report on Current Status and Future Prospects for the Japanese Steel Market by the Japan Iron and Steel Federation (JISF). The Featured Article section deals with the Asian stainless market and the decoupling of GDP and steel demand. Finally, the Market Trend and Analysis section conducts A Comprehensive Survey of Steel Demand Forecasting Methodologies and their Practical Application for the Steel Industry.   For the full version, please visit POSRI website (https://www.posri.re.kr/eng/)   Asian Steel Watch Vol.5 covers the following issues in detail:   [On The Cover] “Towards The Circular Economy: What It Means to the Steel Industry.”    How Steel is Helping to Achieve a Global Circular Economy There is an increasing focus on making products last longer, reusing or mending them, or even remanufacturing them. This new concept has been branded a circular economy where the focus is on reduce, reuse, remanufacture and recycle (4Rs). The steel industry is well placed to contribute to a circular economy and is part of the solution in addressing environmental concerns for many products and services. Key properties of steel (strength, durability, magnetic properties) make steel a key enabler of a circular economy. This article outlines how the steel industry is addressing current environmental issues as well as how regulations can be utilized to generate an overall environmental improvement of products and services. Improving Sustainable Competitiveness in Preparation for a Circular Economy: The Case of POSCO In terms of sustainability and a circular economy, steel is not free from environmental concerns, but steel can become a cornerstone for a sustainable circular economy considering lightweighting, long service life, and rich iron ore reserves, Based on whole life cycle, POSCO is applying life cycle assessment (LCA) to develop products from the perspective of sustainable competitiveness and improve their eco-friendliness. Representative products to which LCA was applied include advanced high strength steel (AHSS), Hyper NO electrical sheet, Giga Steel, and PosMAC. AHSS applied to gasoline vehicles reduces vehicle body weight, improving fuel efficiency and reducing greenhouse gas emissions. Motor cores with Hyper NO minimize core losses, thereby improving the power efficiency of home appliances and cut greenhouse gas emissions. In terms of PosMAC and Giga Steel, POSCO is preparing for a low-carbon circular economy through a full life cycle database and third-party certification. Developing “PosMent” with a higher slag content, POSCO is strengthening the circular industry ecosystem and reduce greenhouse gas emissions.   Tata Steel Europe’s Approach to the Circular Economy in a Life Cycle Perspective Steel has excellent credentials as a sustainable material for a circular economy compared to many other engineering materials, on account of, among other attributes, the very high recycling rates throughout its life cycle. There are nonetheless further opportunities for greater circularity in steel and Tata Steel Europe is one of the several steel companies at the forefront of exploring these opportunities. Links between life cycle thinking, the circular economy, and sustainability are many and are at the heart of Tata Steel Europe’s own journey towards a more sustainable organization. Examples of the company’s activities include its active role in the policy and standards arena, where life cycle and circular economy aspects are increasingly prevalent. Tata Steel Europe’s engagement in other initiatives embraces those with a process as well as a product focus. These include customer- centric approaches in communicating on life cycle environmental performance. This article concludes with a view of future possibilities for steel to further its circular economy credentials and relevance as a sustainable material and how taking a whole life cycle perspective helps tell its story.   Steel in a Circular Economy: Change, Impact, and Prospects Today a linear “take, make, and dispose” economic model is regarded as reaching its limits. As a sustainable growth model to overcome such limits, a circular economy is increasingly being discussed at the global level. The shift to a circular economy may bring tremendous changes to supply and demand of the steel industry and ultimately its future competitiveness. On the demand side, the falling steel unit requirement of steel-consuming industries, expanding service life of steel products, and falling demand for new steel products will fuel a decline in steel demand. On the production side, however, it provides a chance to take advantage of certain hidden strengths of steel—high-quality, high-quantity recycling. To this end, some challenges should be addressed: improving the purity of scrap and maximizing recyclability; the ease of reuse and remanufacture taken into account from the design stage; and building a cooperative linkage system with steel-consuming industries. To deal with opportunities and threats, the steel industry should ensure circularity of steel to maintain its competitive edge and prove that steel is a competitive material for the circular economy era.   Interview with HBIS Group Chairman Yu Yong on, “Challenges and Responses in the Chinese Steel Industry” HBIS Group Chairman Yu Yong talked to Asian Steel Watch about his company, the Chinese steel industry and global steel industry. 1) HBIS Group’s business and vision HBIS Group encompasses over 30 subsidiaries with 120,000 employees. In 2017, its revenue stood at RMB 306.8 billion and year-end total assets at RMB 376.2 billion, ranking 221st among the Fortune Global 500. Bearing the motto “Assuming the Responsibility of a National Industry”, HBIS maintains a vision of becoming a highly competitive steel company. HBIS pursues the “customer-oriented” sales ideology and the philosophy that “employees provide the irreplaceable competitiveness of a company.” Its business areas include steel business, non-steel business, finance sector, and overseas business. In the steel business, it holds the largest market share in China of steel products for home appliances and the second-largest market share of automotive steel. In the non- steel business, HBIS maintains business segments in mining, finance and securities, modern logistics, steel trading, and equipment manufacturing. In the finance sector, It has four subsidiaries—HBIS Finance, HBIS Leasing, HBIS Factoring, and Caida Securities. And in the overseas business, it is ensuring the globalization of our full industrial chain from resources and manufacturing to trading. 2) HBIS Group’s experience in integration and restructuring HBIS management recognizes that industrial development must necessarily become rationalized and mature. To this end, HBIS Group is 1) establishing a modern group management system for strategic management and control, 2) advancing the steel business with central financial management and control as a breakthrough, 3) pursuing reform through a flattened management structure with the production, and 4) upgrading product mix by satisfying increasingly sophisticated customer needs and expanding the industrial chain to downstream customers. 3) The Chinese government’s restructuring in the future The Chinese steel industry will pursue the following five types of restructuring: it will 1) coordinate products and customers in line with government supply-side reform, 2) achieve low-carbon green growth, 3) bolster innovation strategies and improve production efficiency, 4) continue the ideology of reform and opening and accelerate the globalization of the Chinese steel industry, and 5) enhance efficiency through M&A. 4) How HBIS is preparing for strengthening environmental regulations HBIS has maintained its development philosophy of “coexistence of humans, steel, and the environment” and designated “making green steel for human civilization” as its environmental protection ideology. It has taken the lead in formulating and implementing our “Green Development Action Plan.” It has invested RMB 16.5 billion toward achieving this goal. HBIS has closed obsolete facilities, introduced advanced technologies, and strengthened environment management. It has conducted over 430 energy-saving and emission-cutting projects. Now HBIS is among the leaders in energy saving and environmental protection indices and has been described as the “cleanest factory in the world.” 5) Smartization of the Chinese steel industry Major Chinese steel companies’ automation and information levels have reached global standards. The digitalization rate of their major operation processes stands at over 65% and the ERP rate surpasses 70%, demonstrating a sound basis for smartization. HBIS Group has recently emplaced an automation and information support system and made great strides. Some factories have been designated as national smart manufacturing pilot plants. It is moving forward from traditional manufacturing to smart manufacturing: it will 1) implement smartization and robotics applications across all processes; 2) build simulation systems and digital twin systems to reduce the new product development cycle; and 3) realize the potential value in data through the application of next-generation technologies and enhance system analytics and predictability. 6) Global trade conflicts and the steel industry The Chinese steel industry has consistently been focusing on satisfying domestic demand rather than encouraging massive steel exports. China was a net steel importer until 2005. Steel exports have surged in recent years as Chinese steel products have gained global competitiveness and have been subject to objective rules. Since 2010, the share of exports in Chinese crude steel production has stabilized in the range of 7-14%. In 2017, China’s net steel export ratio (% of crude steel production) stood at only 7.7%. In the future, Chinese steel exports will demonstrate a gradual and stable trend due to the upgrading of the Chinese economic structure, phased implementation of supply-side structural reforms, and maturation of the global market structure. (Special Report) Kiyotaka Terashima, Managing Director of the Japan Iron and Steel Federation (JISF) tells about “Current Status and Future Prospects for the Japanese Steel Market” Post-war steel demand in Japan in terms of apparent crude steel consumption experienced three boom periods. Since total fixed capital formation flattened in the 1990s, the expansion in indirect exports has supported the increase in demand. In the pre-Lehman boom period, demand increased mainly in the manufacturing sector, particularly in automobile. Both domestic sales and exports were increasing during the rapid economic growth period, but in the bubble economy period exports declined while domestic sales were increasing. Steel demand is expected to be pushed down in Japan as housing starts are forecast to shrink further due to the declining population. To cope with this issue, Japan is promoting the formation of more compact cities and the renewal of aging buildings and infrastructure. The Japanese steel industry needs to closely observe future demand and evolving needs and develop high-quality steel products. The key to the future success lies in the efforts to constantly promote the research and development of high-value-added products and to improve service capabilities in response to the changing requirements in the steel market. (Featured Articles) 1) The Asian Stainless Steel Market: Trends, Issues and Prospects, 2) The Decoupling of GDP and Steel Demand: Cyclical or Structural?  The Asian Stainless Steel Market: Trends, Issues and Prospects The stainless steel industry clearly demonstrates the economic emergence of Asia. Stainless steel slab production in Asia surged by 35%p from 42% in 2000 to 77% in 2017. The surge is backed by China, India, and the ASEAN nations. The Asian stainless steel market has five characteristics: 1) high growth potential, 2) influence of China’s NPI mills, 3) growing complexity of nickel market, 4) spread of regulation, and 5) restructuring and consolidation. The Asian stainless steel industry is facing unprecedented challenges, because it can neither seek growth as ROI and cost advantages are uncertain, nor give up the market due to increasing demand. To overcome such challenges, it should seek both cost competitiveness and differentiated strategies.  The Decoupling of GDP and Steel Demand: Cyclical or Structural? In the 2000s, global steel demand growth consistently surpassed global  GDP growth. The dip in global steel demand after 2012 can be mostly explained by the slowdown in global investment and exports. China shifted its growth strategy from investment and exports to consumption as President Xi Jinping took power in November 2012. The decoupling of GDP and steel demand will last for the time being on several aspects: global investment and exports, raw materials prices forecast, mega trend (aging populations, the sharing economy and the Fourth Industrial Revolution), and major forecast institutions’ prospects. Just as the decoupling of global GDP and steel demand persisted until China emerged as a new growth engine for steel demand after the early 2000s, there is a possibility that the decoupling will repeat. The global steel industry should prepare for this.   (Market Trend and Analysis) A Comprehensive Survey of Steel Demand Forecasting Methodologies and their Practical Application for the Steel Industry This article classifies and compiles the methodologies through a comprehensive review of the literature, and then finds clues to enhance the accuracy of steel demand forecasting. The approaches for forecasting steel demand can broadly be classified into the econometric and intensity of use (IU) approaches. Econometric approaches are divided into the econometric demand model and vector autoregression (VAR). The econometric approach widely uses a simple single equation or a simultaneous equation to forecast steel consumption, considering that steel demand is affected by macroeconomic variables including GDP, industrial production, trade structure, and economic volatility. The VAR methodology has the merit of avoiding the weakness of econometric demand model that requires forecasts of exogenous variables since VAR assumes all variables in a model are endogenous. The intensity of use (IU) approaches rose to prominence in the early 1970s when some OECD member countries observed their steel demand fall while macroeconomic indicators grew. The IU approach is a useful concept that attempts to link steel consumption to the technological and structural changes in an economy. Mathematical methodologies and computational approaches Hybrid mathematical methodologies seek to enhance predictability based on the grey model, algorithm, and fuzzy ARIMA model. The steel weighted industrial production (SWIP) index is broadly used by worldsteel and other steel associations. To complement the weakness of top-down macro methodologies which directly predict total steel demand, POSRI is concurrently applying a bottom-up micro methodology to predict demand for 16 steel products and summing them to forecast total demand.   Notes to Editors:   POSCO Research Institute (POSRI) is a leading research institute headquartered in Seoul, Korea. Established in 1994, it offers research and consulting especially focusing on steel. However, its research areas are not confined to steel. POSRI conducts research in various fields, including the economy, steel-consuming industries, business, materials, energy, and the environment. POSRI publishes Asian Steel Watch, a bi-annual English journal specialized in the Asian steel industry and market, and Chindia Plus, a bi-monthly Korean journal specialized in China, India and other Asian countries.

Cheol-Ho Chung,Sojin Yoon 2018.07.10 2,508
85

A Comprehensive Survey of Steel Demand Forecasting Methodologies and their Practical Application for the Steel Industry  다운로드

This article classifies and compiles the methodologies through a comprehensive review of the literature, and then finds clues to enhance the accuracy of steel demand forecasting. The approaches for forecasting steel demand can broadly be classified into the econometric and intensity of use (IU) approaches. Econometric approaches are divided into the econometric demand model and vector autoregression (VAR). The econometric approach widely uses a simple single equation or a simultaneous equation to forecast steel consumption, considering that steel demand is affected by macroeconomic variables including GDP, industrial production, trade structure, and economic volatility. The VAR methodology has the merit of avoiding the weakness of econometric demand model that requires forecasts of exogenous variables since VAR assumes all variables in a model are endogenous. The intensity of use (IU) approaches rose to prominence in the early 1970s when some OECD member countries observed their steel demand fall while macroeconomic indicators grew. The IU approach is a useful concept that attempts to link steel consumption to the technological and structural changes in an economy. Mathematical methodologies and computational approaches Hybrid mathematical methodologies seek to enhance predictability based on the grey model, algorithm, and fuzzy ARIMA model. The steel weighted industrial production (SWIP) index is broadly used by worldsteel and other steel associations. To complement the weakness of top-down macro methodologies which directly predict total steel demand, POSRI is concurrently applying a bottom-up micro methodology to predict demand for 16 steel products and summing them to forecast total demand.

Ji-Mi Chu,Moon-Kee Kong,Center for Economic Research and Information Analysis 2018.07.10 4,223
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The Decoupling of GDP and Steel Demand: Cyclical or Structural?  다운로드

∙        In the 2000s, global steel demand growth consistently surpassed global  GDP growth. The dip in global steel demand after 2012 can be mostly explained by the slowdown in global investment and exports. China shifted its growth strategy from investment and exports to consumption as President Xi Jinping took power in November 2012. ∙        The decoupling of GDP and steel demand will last for the time being on several aspects: global investment and exports, raw materials prices forecast, mega trend (aging populations, the sharing economy and the Fourth Industrial Revolution), and major forecast institutions’ prospects. Just as the decoupling of global GDP and steel demand persisted until China emerged as a new growth engine for steel demand after the early 2000s, there is a possibility that the decoupling will repeat. The global steel industry should prepare for this.

Cheol-Ho Chung 2018.07.10 2,492
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The Asian Stainless Steel Market: Trends, Issues and Prospects  다운로드

∙        The stainless steel industry clearly demonstrates the economic emergence of Asia. Stainless steel slab production in Asia surged by 35%p from 42% in 2000 to 77% in 2017. The surge is backed by China, India, and the ASEAN nations. The Asian stainless steel market has five characteristics: 1) high growth potential, 2) influence of China’s NPI mills, 3) growing complexity of nickel market, 4) spread of regulation, and 5) restructuring and consolidation. ∙        The Asian stainless steel industry is facing unprecedented challenges, because it can neither seek growth as ROI and cost advantages are uncertain, nor give up the market due to increasing demand. To overcome such challenges, it should seek both cost competitiveness and differentiated strategies. 

Chan-Wook Park 2018.07.10 4,325
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Current Status and Future Prospects for the Japanese Steel Market  다운로드

∙        Post-war steel demand in Japan in terms of apparent crude steel consumption experienced three boom periods. Since total fixed capital formation flattened in the 1990s, the expansion in indirect exports has supported the increase in demand. In the pre-Lehman boom period, demand increased mainly in the manufacturing sector, particularly in automobile. Both domestic sales and exports were increasing during the rapid economic growth period, but in the bubble economy period exports declined while domestic sales were increasing. ∙        Steel demand is expected to be pushed down in Japan as housing starts are forecast to shrink further due to the declining population. To cope with this issue, Japan is promoting the formation of more compact cities and the renewal of aging buildings and infrastructure. ∙        The Japanese steel industry needs to closely observe future demand and evolving needs and develop high-quality steel products. The key to the future success lies in the efforts to constantly promote the research and development of high-value-added products and to improve service capabilities in response to the changing requirements in the steel market.

Kiyotaka Terashima 2018.07.10 2,200
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Challenges and Responses in the Chinese Steel Industry  다운로드

Interview with HBIS Group Chairman Yu Yong Dr. Yu Yong came into the steel industry in 1987. In January 2006, he became Vice President of Tangshan Iron & Steel Company. In 2010, he was appointed Chairman of HBIS Tangsteel Company. From 2012 to 2013, he served as President and Vice Chairman of HBIS Group. In December 2013, he was appointed Chairman of HBIS Group. Since January 2018, he has been Chairman of Chinese Iron & Steel Association(CISA). Dr. Yu Yong holds a master’s and doctorate degrees in Metallurgical Engineering from University of Science & Technology Beijing (USTB). In 2002, he went to Singapore as a Senior Visiting Scholar in Nanyang Technological University, where he got a Doctorate in Economics.

Yu Yong 2018.07.10 4,272
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Towards The Circular Economy: What It Means to the Steel Industry  다운로드

1) How Steel is Helping to Achieve a Global Circular Economy (Clare Broadbent) 2) Improving Sustainable Competitiveness in Preparation for a Circular Economy: The Case of POSCO (Yoon-Gih Ahn) 3) Tata Steel Europe’s Approach to the Circular Economy in a Life Cycle Perspective (Peter Hodgson and Paul Brooks) 4) Steel in a Circular Economy: Change, Impact, and Prospects (Yoon-Chung Chin)

Yoon-Gih Ahn,Yoon-Jung Chin,Clare Broadbent,Peter Hodgson 2018.07.10 4,546
79

Asian Steel Watch vol. 4 Press Release (December 2017)

PRESS RELEASE On December 28, 2017, POSCO Research Institute (POSRI) released the fourth issue of Asian Steel Watch (ASW). This bi-annual English journal is specialized in the Asian steel industry and market. It deals with current issues in the Asian steel industry and features interviews with industry leaders and market analysis. It is comprised of five sections: Special Report, On the Cover, Interview, Featured Articles, and Asian Steel Market Outlook.   Asian Steel Watch aims to provide insightful, in-depth analysis of the Asian steel market. The fourth issue of Asian Steel Watch begins with Special Report by Ohjoon Kwon, CEO of POSCO which explains the history of iron and steel and how they affect our lives under the title, “Steel, Our Timeless Heritage.” The On the Cover section focuses on India, titled “Opportunities and challenges of the Indian steel industry,” featured interview with Thachat Viswanath Narendran, CEO & Managing Director of Tata Steel and Chairman of the Economics Committee of worldsteel. Asian Steel Watch Vol. 4 also deals with steel restructuring in Europe and Japan and development of the Korean steel industry and their implications. The Asian Steel Market Outlook section examines steel-consuming industries, including automobile, shipbuilding, and home appliance, to forecast flat steel demand in Asia over the next decade. This journal hopes to grant insight into the Asian steel industry, lay a firm foundation for the collaborative growth of Asia’s steel industry, and further contribute to the stability and prosperity of the global steel market.   Asian Steel Watch Vol.4 addresses the following issues:   (Special Report) Ohjoon Kwon, CEO of POSCO explains the history of iron and steel and how they affect our lives under the title, “Steel, Our Timeless Heritage” History tells that people have formed the very backbone of human civilization and modern life with iron and steel. The Hittites, who were able to artificially refine iron for the first time in human history, defeated the bronze-wielding Egyptians at the Battle of Kadesh. The steel technology enabled the Hittites to rapidly expand their empire to match the Egyptians in the competition for regional hegemony around the eastern Mediterranean Sea. Romans held hegemony over the Mediterranean by taking advantage of the superiority of their iron-clad troops, which defeated their enemies across the Mediterranean and all the way to Britain. However, the military advantage provided by the steel stirrups allowed the Huns to drive westward, which gave a rise to an end to the Western Roman Empire. Steel has also changed human history by influencing our thoughts and philosophy. First of all, steel enriched Confucian philosophy in ancient China. Increased use of farming tools made of steel greatly boosted agricultural productivity and the authority of kings or rulers was weakened with the rise of a new social class. It was inevitable for the royal class to employ a new philosophy, such as Confucianism, to protect their power. In the West, as improved steelmaking techniques increased steel supplies, production methods evolved from workshop-based to factory-based mass production which led to the emergence of industrial capitalism supported by new theories, particularly from the Scottish economist and moral philosopher Adam Smith. There are multitude of ways that iron and steel have ensured the survival of humanity and other living creatures, as well as shaped our modern lifestyle and culture. Recalling the magnetic field created by the core of iron within the Earth, also known as the Van Allen Belt, it protects people from lethal solar winds. There are diverse applications of steel that ensure safe and convenient living: transportation, pipelines, bridges, transformers, musical instruments, and so much more. Steel technology has also been a major contributor to extending human longevity. For instance, steel pipes have replaced copper to convey clean water. Improved steel technology is continuously adopted in steel products for safer and cleaner use in our water systems, oil and gas pipelines, and electricity transmission. At the same time, specialized steel products have become the core materials for renewable energy production such as solar, wind, and tidal power generation. In addition, strong and reinforced steel is fundamental in optimizing the use of urban space through super-towers and other skyscrapers, and also for disaster prevention in the form of tsunami protection walls. Steel products continue to foster exciting innovations in critical areas such as mitigating the impact of global warming, helping the disabled recover mobility, and improving the protective qualities of military equipment. The current civilization has been blessed with the fruits of rapid industrialization and emergence of IT technology. Nevertheless, the Age of Steel is an ongoing phase as steel is the enabler of such remarkable advances. In the “On The Cover” section, four articles are covered under the main theme of “Opportunities and challenges of the Indian steel industry.”    Understanding Incredible India India is undergoing a great transition as the post-reform generation strikes out into the world. This generation supports growth-oriented domestic economic development creating job opportunities and a strong India internationally. At the onset of the Modi administration in 2014, India’s economic paradigm shifted its focus from distributive or inclusive growth to growth-oriented development. From a structural perspective, India is highly likely to continue to expand at least until 2025-30. Mainly based on the “Hindi belt” and “cow belt,” India is establishing a Hindu state. For a short term, Hindu fundamentalists’ expanded influence is helpful to consolidate power and implement various measures to stabilize the regime. Over the long term, it will pose a threat to the country as it pursues stability, integration of society, and national development. Depending on how the Modi administration wields this double-edged sword, the meaning of Incredible India will change substantially in the future. Opportunities and Challenges of the Indian Steel Industry in the Context of Future Growth India has always been seen as a potential for significant steel market expansion. There have been various forecasts at different points, raising expectation of the steel industry and investors about growth prospects of the industry. In the recently adopted steel policy of the government of India, it has stated that India’s crude steel production capacity will have to reach 300 Mt by the year 2030-31, from the current level of about 125 Mt, which incorporates a domestic finished steel consumption forecast of about 225 Mt and export of about 20 Mt. However, the government’s goal is rather optimistic in light of varying structural issues of the Indian steel industry, including delayed projects, high debts, low labor productivity, operation inefficiency, and lack of infrastructure. Overcoming such mounting challenges, the Indian steel industry should move forward taking into account the impact of scrap generation on India’s competitiveness in raw materials, impact of environmental regulations on new investment, and impact of speculative assets on steel prices. Restructuring Scenario of the Indian Steel Industry to Enhance Its Global Competitiveness The Indian government has recently released the“National Steel Policy (NSP) 2017,”which declares the aim of increasing steel production capacity from 122 Mt in 2015 to 300 Mt in 2030 in order to attain self-sufficiency.  However, the insolvency issue recently looming large in the Indian steel industry makes this goal appear somewhat hollow. As of March 2016, the Indian steel industry’s debt surpassed INR 3 trillion, and between INR 1.15 to 2 trillion within it is categorized as non-performing assets. However, steel imports are not the only culprit in the insolvency of the Indian steel industry. There are other fundamental reasons underlying the insolvency. The first relates to policies based on the ripple effect from the NSP 2005. The second cause of insolvency is investment fervor among Indian steelmakers, which left huge aftermath within the industry. Restructuring of the Indian steel industry will be mainly led by Tata and JSW. Now is the right time for the Indian government to seek not only quantitative growth, but also qualitative improvement to enhance the global competitiveness of the domestic steel industry.  Can India Become the Next China? With India’s economic growth rate exceeding that of China in 2016, many people wonder if India can manage to become the next China. A comparison of the two countries should be able to determine if India’s steel industry can match that of China’s. Comparing the ratio of gross fixed capital formation to GDP, contribution of secondary industry to GDP, and urbanization rate of India and China, the gap between the two countries is significant and is less likely to narrow profoundly. Economic and social characteristics in India hamper high steel demand growth: strict labor laws and practices, the lack of infrastructure, high interest rates, insufficient public financial support, and complex issues related with securing land. India has surpassed China in terms of economic growth. However, its economic development has mainly been propelled by the service sector, and India’s steel-consuming industries, such as manufacturing and construction, are relatively weaker than those of China. Interview with Thachat Viswanath Narendran, CEO & Managing Director of Tata Steel and Chairman of the Economics Committee of worldsteel under the title, “Rising Elephant: Tata and the Indian Steel Industry” Thachat Viswanath Narendran, CEO & Managing Director of Tata Steel and Chairman of the Economics Committee of worldsteel talked to Asian Steel Watch about his company, the Indian steel industry and global steel industry: 1) Tata Steel’s brief history and business, 2) factors that drive growth of India’s steel demand, 3) restructuring of Tata Steel’s European operations, 4) restructuring of the Indian steel industry, 5) medium- to long-term outlook on the global steel industry, and 6) advise for foreign investors. 1) Tata Steel’s brief history and business Tata Steel was set up more than a 100 years ago as our Founder J N Tata felt that for any nation to be able to stand on its own, a strong steel industry is essential. The company was set up not only to become a leading steel company in the world but also to become a benchmark in corporate citizenship. The founder, J N Tata, felt that the community is not just another stakeholder in the enterprise but the very purpose of its existence. We have a strong culture of continuous improvement and are the only steel company outside Japan to win the Deming Grand Prize. We have done some very innovative work in marketing and sales and have a strong distribution network and a bouquet of very successful brands. We are the leading supplier to India’s automotive industry and have a market share of 44% in our supplies to the automotive industry. We are the number one player in India for wires and tinplates, and we also have a large pipes business. Overall we have a passionate and talented employee base, strong relationships in the market, a great competitive position on cost due to our efficiencies, and a culture of continuous improvement. This explains our longevity and strength even after being around for 110 years. 2) Factors that drive growth of India’s steel demand India is still at an early stage of development and so the potential for growth in steel consumption in India is immense. Our per capita consumption of steel is currently at 63 kg which is about 25% of the world average and 15% of what it is in China. The per capita consumption of steel in rural India is about 5 kg. If India has to grow at 7 to 8% as has been predicted, the government has to spend on building infrastructure and a lot of actions on that are already evident. According to the National Steel Policy, the biggest growth in steel consumption is coming from the infrastructure segment where the government is expecting steel consumption to grow from the current level of 10 million Mt to 100 million Mt in the next 10 to 15 years. Tata Steel will continue to invest and grow in our two main production sites of Jamshedpur & Kalinganagar. Over the next 10 years, we hope to grow from the current level of 13 million Mt in India to 25 to 30 million Mt. 3) Restructuring of Tata Steel’s European operations Tata Steel has a footprint of 2 million Mt in Southeast Asia which is essentially long products for the construction industry through the EAF route. It has three plants in Thailand and one plant in Singapore for steel making and rolling mills and downstream units in both countries as well as in Vietnam, Malaysia and Hong Kong. In Europe, it has a footprint of 12 million Mt now (between the Netherlands and the UK). The focus of its overseas facilities is on efficiency and profitability and not so much on growth. Most of the restructuring in Europe and Southeast Asia is complete but we will continue to look for opportunities to improve the performance. 4) Restructuring of the Indian steel industry The Indian Steel Industry has a temporary overcapacity problem as I believe that demand growth will outstrip supply growth over the next few years. Restructuring is happening because of the financial health of this sector which has invested a lot of capital in building capacity and has been plagued by a falling market in 2015 and early 2016. Fundamentally, India’s steel industry is quite competitive. Until 2015 it had no problem competing with imports from anywhere in the world. When a slowdown in China led to imports flooding in from China and other countries at prices lower than the prices in their domestic markets, the industry took up the issue with the government and had got some support. India also allows 100% foreign direct investment (FDI) in steel and mining and so anyone who is keen to participate in growth opportunities in India is welcome to invest in India. 5) Medium- to long-term outlook on the global steel industry Until a few months back, we felt that growth in consumption in countries other than China will more than offset the shrinkage in consumption in China, so overall global growth in steel consumption will be in the 1 to 2% range. The most significant demand growth is expected to come from India and Southeast Asia. Together, it is a market of almost 1.7 billion people consuming about 160 million Mt of steel and growing at 5 to 6% on average. 6) Advise for foreign investors When foreign investors look at India they should take a long term view. It is a challenging market but a market with full of potential. It may be one country but it is not a homogeneous market. There is a lot of talent available in India and it is a young country demographically. There will be challenges in land acquisition and sometimes with the myriad values and regulations. But it is a market worth investing in. Korean automotive companies and appliance manufacturers are great examples of foreign companies who came in well before many others and have built a strong equity in the domestic market. It is one of the fastest growing large economies in the world and still at an early stage of development. It is blessed with a lot of good quality raw materials. It has a government which is trying very hard to improve the ease of doing business and attract foreign investment. (Featured Articles) In this section, there are three articles: Legacy from Europe’s Restructuring Experiences and Its Implications to the Asian Steel Industry; The Korean Steel Industry in Retrospect: Lessons for Developing Countries; and Learning from the Experiences of the Japanese Steel Industry in the Lost Decades.    Legacy from Europe’s Restructuring Experiences and Its Implications to the Asian Steel Industry Since the 1973 oil crisis when steel demand peaked, the steel industry experienced a long, hard and costly restructuring process. Restructuring of the European steel industry was taking place from the mid-1970s under such a context that the steel demand had passed its peak level as industrialization and urbanization had seen their close completion. National economic priorities were then transforming gradually from industrial sector to service sector and industrial sector itself was transforming from traditional manufacturing industries to advanced and hi-tech ones. The privatization process lasted for 10 years, involving in many stakeholders. As a result, steel capacity was cut by 20% and steel capacity utilization ratio surpassed 70%, employment reduced by 44%, and labor productivity of the west European steel industry improved by 60%. As exit barriers and institutional accommodation prevent restructuring from timely start-up and completion, the government has a role to play in the restructuring process at different levels. It can provide a policy framework where restructuring can take place and ensure a level playing field during the restructuring process. While macro-economic conditions and government favorable measures came out, it is then the individual steel company that plays a vital role in the restructuring process. Besides focusing on internal adjustments, individual steel companies could pay some due attention to changes both in the economy and society, such as social and industrial megatrends (demographics, technologies, process, and IoT), and their possible impacts upon the future steel industry. The Korean Steel Industry in Retrospect: Lessons for Developing Countries Rising from the ashes of war, Korea has joined the ranks of advanced countries. The rapid development of the Korean steel industry offers lessons to developing countries. The development patterns differ before and after the financial crisis of 1998. Examining the changes that took place around the crisis of 1998 based on factors related to steel use, there are some distinctive items: a significant slowing in the urbanization rate after 1996, gross capital formation as percentage of GDP declining after peaking in 1996, and the Korean economy being shifted from government-driven to market-driven. The author adopted various theories to re-examine the success factors and offer implications for developing nations—catch-up theory, infant industry argument, fourth factor of production, Lewis turning point, and endogenous growth theory. Based on its analysis on the development and success factors of the Korean steel industry, this article offers several policy implications for developing countries. The first is the importance of the government’s role and strategic decisions. The second implication is entrepreneurial leadership and a “can-do” attitude. The third is the importance of industrial policy based on medium- to long-term outlook for supply and demand. Finally, there is the importance of determined drive of technological development and R&D investment.  Learning from the Experiences of the Japanese Steel Industry in the Lost Decades The experience of the Japanese steel industry which underwent a long period of sluggish demand might provide lessons for East Asian steelmakers as they navigate tumultuous times. In the supply chain connecting Japan’s steel-producing and -consuming industries, there exists a long-established order. They do not change existing suppliers or find new suppliers simply to save costs. Many Japanese steelmakers tolerate a rather high cost structure for a time and select steel materials through a long-term perspective, thus increasing the overall competitiveness of their own supply chains. They diversified their export targets from a focus on the USA to include Southeast Asia and other emerging markets. They also shifted their product portfolio for the US market to high value-added products in close cooperation between the public and private sectors. From the late 1970s to the 1990s, restructuring occurred through two different methods: facility revamps and workforce rationalization. The industry attempted to increase its global competitiveness by enhancing economies of scale through integration and reducing redundancies via reshuffling.   (Asian Steel Market Outlook) Asian Steel Market Outlook: Flat Product Demand for the Next Ten Years This section forecasts flat steel demand upon close examination of steel-consuming industries, including automobile, shipbuilding, and home appliance, in major Asian countries—Korea, China, Japan, India, and the ASEAN-5—over the next decade (2018-2027). Steel-consuming industry outlook in Korea, China, Japan, India, and the ASEAN-5 Automobile: Automobile production in China, the ASEAN-5, and India is expected to grow continuously by 2027 thanks to government policy support and facility investment by global automakers, despite low growth trends around the world. Shipbuilding: Global shipbuilding deliveries will decline to 50.4 mil. GT by 2020 due to the“order cliff” of the last 2-3 years, but will gradually recover by 2025. Home appliance: As Chinese home appliance makers go global through M&As with US and Japanese enterprises, they are threatening the traditional strongholds of Japan and Korea.   < Steel-consuming Industry Outlook in Asia >     Automobile production (mil. units) Shipbuilding deliveries (mil. GT) Home appliance production 2016 2027 CAGR (‘17~’27) 2016 2027 CAGR (‘17~’27) 2016 2027 CAGR (‘17~’27) China 28.1 37.7 2.7% 22.3 24.1 0.7% 417.0 456.0 0.8% Korea 4.2 4.5 0.6% 25.4 20.6 -1.9% 16.9 15.8 -0.6% Japan 9.2 9.5 0.3% 13.3 13.9 0.4% 7.59 7.57 0.0% India 4.5 7.8 5.0% - - - 25.0 34.2 2.9% ASEAN-5 4.0 5.8 3.4% - - - 64.6 96.6 3.7% Source: POSRI   Flat steel demand outlook in Korea, China, Japan, India, and the ASEAN-5 Despite sluggish demand for flat products in the construction sector, China’s overall flat product demand is expected to grow at a compound average growth rate (CAGR) of 0.6% to reach 320 Mt by 2027 thanks to robust demand for automobiles. Flat product demand will remain sluggish until 2020 since the country has the largest share of shipbuilding within total flat product demand among all East Asian countries. However, it is expected to grow at a CAGR of 1% after 2020. Flat product demand is expected to grow slightly at a CAGR of 0.6% over the next decade due to stagnation in the automotive and home appliance industries and only weak recovery in the shipbuilding industry. Flat product demand will continue to grow robustly at a CAGR of approximately 6% by 2027, thanks to high growth in major steel-consuming industries, including automobiles and construction. Flat product demand is expected to increase at a CAGR of 5.2% to reach 67 Mt by 2027 thanks to robust growth in construction investment and rapid expansion of the automotive and home appliance markets. < Flat Steel Demand Outlook in Asia > (Mt) 2016 2018 2020 2024 2027 CAGR (‘16~’20) CAGR (‘21~’27) CAGR (‘16~’27) China 297.3 305.6 312.1 314.9 316.7 1.2% 0.2% 0.6% Korea 28.3 28.1 29.0 30.5 31.4 0.6% 1.2% 1.0% Japan 29.5 30.1 30.3 30.8 31.5 0.7% 0.6% 0.6% India 32.7 36.3 41.6 54.2 63.9 6.2% 6.3% 6.3% ASEAN-5 38.4 42.6 47.8 58.5 67.2 5.6% 5.0% 5.2%   Source: POSRI   Notes to Editors:   POSCO Research Institute (POSRI) is a leading research institute headquartered in Seoul, Korea. Established in 1994, it offers research and consulting especially focusing on steel. However, its research areas are not confined to steel. POSRI conducts research in various fields, including the economy, steel-consuming industries, business, materials, energy, and the environment. POSRI publishes Asian Steel Watch, a bi-annual English journal specialized in the Asian steel industry and market, and Chindia Plus, a bi-monthly Korean journal specialized in China, India and other Asian countries.

Cheol-Ho Chung,Sojin Yoon 2017.12.29 4,659
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[Interview] Rising Elephant: Tata and the Indian Steel Industry  다운로드

Interview with Tata Steel CEO Mr. Thachat Viswanath Narendran CEO & Managing Director, Tata Steel Limited Mr. T.V. Narendran joined Tata Steel after completing his MBA from IIM Calcutta in 1988. He became the Managing Director of Tata Steel (overseeing India and South East Asia) on November 1, 2013. On 31st October, 2017, he was elevated to CEO & Managing Director of Tata Steel Limited. Mr. Narendran’s career in Tata Steel spanned many areas in India & Overseas including Marketing & Sales, International Trade, Supply Chain & Planning, Operation & General Management in Jamshedpur, Kolkata, Dubai & Singapore. He was actively involved in Tata Steel’s first overseas acquisition, NatSteel, and was seconded there as an Executive Vice President in 2005. He took over as the President & CEO of NatSteel from January 2008. He is currently on the Boards of Tata Steel Limited and Tata Steel Europe. He is also the Chairman of Tata Steel Thailand and NatSteel. He is the Chairman of the Board of Governors of XLRI. He is a member of the Board of the World Steel Association and the Chairman of the Economics Committee of the World Steel Association. He is the co-chair of the Mining & Metals Governors Council of the World Economic Forum. He is a member of the National Council of CII and former Chairman of CII Eastern Region. He is also a member from Indian side in BRICS Business Council, Co-Chair of the India Myanmar Joint Trade & Investment Forum and a member of the Indo-French CEO Council.

Thachat Viswanath Narendran 2017.12.28 2,933
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Steel, Our Timeless Heritage  다운로드

History tells that people have formed the very backbone of human civilization and modern life with iron and steel. The Hittites, who were able to artificially refine iron for the first time in human history, defeated the bronze-wielding Egyptians at the Battle of Kadesh. The steel technology enabled the Hittites torapidly expand their empire to match the Egyptians in the competition for regional hegemony around the eastern Mediterranean Sea. Romans held hegemony over the Mediterranean by taking advantage of the superiority of their iron-clad troops, which defeated their enemies across the Mediterranean and all the way to Britain. However, the military advantage provided by the steel stirrups allowed the Huns to drive westward, which gave a rise to an end tothe Western Roman Empire. Steel has also changed human history by influencing our thoughts and philosophy. First of all, steel enriched Confucian philosophy in ancient China. Increased use of farming tools made of steel greatly boosted agricultural productivity and the authority of kings or rulers was weakened with the rise of a new social class. It was inevitable for the royal class to employ a new philosophy, such as Confucianism, to protect their power. In the West, as improved steelmaking techniques increased steel supplies, production methods evolved from workshop-based to factory-based mass production which led to the emergence of industrial capitalism supported by new theories, particularly from the Scottish economist and moral philosopher Adam Smith. There are multitude of ways that iron and steel have ensured the survival of humanity and other living creatures, as well as shaped our modern lifestyle and culture. Recalling the magnetic field created by the core of iron within the Earth, also known as the Van Allen Belt, it protects people from lethal solar winds.There are diverse applications of steel that ensure safe and convenient living: transportation, pipelines, bridges, transformers, musical instruments, and so much more. Steel technology has also been a major contributor to extending human longevity. For instance, steel pipes have replaced copper to conveyclean water. Improved steel technology is continuously adopted in steel products for safer and cleaner use in our water systems, oil and gas pipelines, and electricity transmission. At the same time, specialized steel products have become the core materials for renewable energy production such as solar, wind, and tidal power generation. In addition, strong and reinforced steel is fundamental in optimizing the use of urban space through super-towers and other skyscrapers,and also for disaster prevention in the form of tsunami protection walls. Steel products continue to foster exciting innovations in critical areas such as mitigating the impact of global warming, helping the disabled recover mobility, and improving the protective qualities of military equipment. The current civilization has been blessed with the fruits of rapid industrialization and emergence of IT technology. Nevertheless, the Age of Steel is an ongoing phase as steel is the enabler of such remarkable advances.

Ohjoon Kwon, CEO of POSCO 2017.12.28 3,258
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Steel Industry : Learning From The Past While Moving Forward  다운로드

1) Legacy from Europe’s Restructuring Experiences and Its Implications to the Asian Steel Industry 2) The Korean Steel Industry in Retrospect: Lessons for Developing Countries 3) Learning from the Experiences of the Japanese Steel Industry in the Lost Decades

Hou Jie,Cheol-Ho Chung,Dong-Cheol Sa,Jin-Woo Lee 2017.12.28 5,366
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Asian Steel Market Outlook: Flat Product Demand For The Next Ten Years  다운로드

Automobile Shipbuilding Home Appliance Flat Product Demand

Moon-Kee Kong,Ji-Mi Chu 2017.12.28 3,302
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