Reports > Steel

POSRI Megatrend Research Series (1) – Post-pandemic Megatrends and Their Influence on the Steel Industry

2023.01.11 Jun H. Goh

Jun H. Goh

#Hashtag

#COVID-19 #geopolitics #green steel #hydrogen #mega city #mega trend #mobility
Following the COVID-19, the global steel industry is at a turning point for the new era, influenced by a paradigm shift in four major areas, while experiencing an inflection point in its development. The drivers of this transformation include accelerated climate change, carbon-neutral technological innovation, societal and economic changes such as aging populations and digitization, as well as geopolitical uncertainties leading to energy and supply chain restructuring.

As a material, steel is poised to become the most crucial substance for environmentally friendly construction, new mobility solutions, and the development of green energy infrastructure in the future. All these changes are expected to occur through urban development, surpassing 75% of global economic activities. Additionally, based on hydrogen-based green steel and recyclability across the entire value chain, steel, as a sustainable material, is anticipated to contribute to a human society in the future.
Table of Contents

  • 1. Introduction and Framework

  • 2. A Post-pandemic Paradigm Shift

  • 3. Future Urban Development

    • Urban Construction

    • Urban Mobility

    • Urban Energy

  • 4. Future Steelmaking Technology and Metallic Balance

  • 5. Vision and Agenda for a Sustainable and Resilient Global Steel Industry

Executive Summary

  • 1. A Post-pandemic Paradigm Shift

    • Four megatrends will continuously induce significant changes in future societies and economies.

      • (Climate Change) Beyond economic and industrial structural changes, it will affect global technological hegemony and dynamics.

      • (Technological Innovation) Innovative technologies will decarbonize materials and energy, realizing a carbon-neutral future.

      • (Socioeconomic Changes) Aging populations and increased economic influence of the younger generation.

      • (Geopolitical Rebalancing) Anticipated transitions in global supply chains, carbon pricing systems, and trade structures. → These megatrends will impact the future structure of the steel industry through the evolution of urban development and mobility.

  • 2. Future Urban Development

    • The evolution of cities, strengthened by a low-carbon framework as energy, infrastructure, and mobility hubs, is expected to create a momentum for quantitative and qualitative changes in future steel demand, focusing on green construction, distributed power generation, and environmentally friendly mobility.

      • (Construction) The strengthening of environmental needs, the adoption of digital 3D technology, increased demand for environmentally friendly composite materials, and a growing role as the main driver of steel demand.

      • (Mobility) New demand for environmentally friendly/convenient/safe options, emerging needs for urban air mobility, hyperloop, and personal mobility.

      • (Energy) The integration of distributed power generation and the creation of an ecosystem infrastructure for renewable energy/hydrogen are expected to expand the demand for steel.

  • 3. Future Steelmaking Technology and Metallic Balance

    • Accelerated development of decarbonization technologies is expected to replace or shift the current mainstream methods.

      • A carbon-neutral path for the steel industry: Process optimization (until 2030) → Accelerated carbon reduction (until 2050).

      • Future competitiveness of the steel industry depends on low-cost sourcing of raw materials and securing energy-efficient facilities.

    • The transition to hydrogen-based clean steelmaking is expected to bring about significant changes to metallic balance in the medium to long term.

      • Decreasing demand for pig iron while significant growth in demand for steel scrap and direct reduced iron.

    • Adapting to a circular economy and geopolitical restructuring is crucial for maintaining a stable supply of steel.

      • Ensuring circularity in the entire value chain, including both upstream and downstream aspects of the steel industry, is crucial.

      • Beyond geopolitical and geoeconomic changes, it is necessary to maintain a stable supply chain of steel for the future.

    • Additionally, digital transformation is spreading innovation to the steelmaking (automation → digital twin) and steel business processes (virtualization of actual tasks such as marketing and logistics).

  • 4. Vision and Agenda for a Sustainable and Resilient Global Steel Industry

    • (Vision) The future steel industry must contribute to sustained growth in a human society by providing environmentally friendly materials. Achieving this vision requires efforts in four areas: ① Growing along the market, ② Material solution provider, ③ Smart & digital manufacturer, and ④ Carbon-neutral ecosystem.

    • (Future of Steel Industry in 2050) There will be a growing importance of resource-circular and environmentally friendly steel materials needed for future cities, such as zero-energy buildings, green mobility, and renewable energy infrastructure.

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