Can we imagine a day without steel?

Innovation in steel has been helping human civilisation to smash through new barriers, strengthen our lives, and hit new heights. Recently, Dutch company MX3D has embarked upon an innovative project to construct a steeled hanging-bridge over an Amsterdam canal using a 3-D printer. South America's tallest structure Amazon Tall Tower Observatory (ATTO) stands in the heart of Brazil's Amazon rainforest. The steeled structure is located about 170 km northeast of the Brazilian city of Manaus and reaches a height of 325 metres - 25 metres taller than Eiffel Tower. Globally, an increasing number of taller and more striking skyscrapers are being designed and built in Dubai, Shanghai, New York, London, Moscow and elsewhere. The world's major cities are giving clear indications that the race to reach new heights is on. In South Korea, researchers at Pohang University of Science and Technology have developed lightweight steel as strong and ductile as the titanium! In Saudi Arabia's coastal city of Jeddah, the construction of the world's tallest building is underway - Kingdom Tower is expected to be completed in five years requiring an estimated 80,000 tonnes of steel. Plus, Emirates Steel is taking part in an innovative and ambitious project in the United Arab Emirates (UAE) - to capture, use and store 800,000 tonnes of carbon-dioxide (CO2) per annum from its steel plant. Scheduled to be completed by 2016, the project's goal is to produce steel with a lower CO2 emission to the atmosphere - capture the CO2 generated from the production of iron and steel; inject it into existing oilfields for enhanced oil recovery (EOR); and store it at the same time.
Currently, China's steel consumption is roughly half of the world's total. However, it is forecasted that China's annual demand for steel will continue falling until 2017 and settle at approximately 10 per cent below its high-water mark. With so much excess capacity this year, China is likely to ship more of the metal abroad than Japan (world's second-biggest steel producer) could make if its steel mills were running at full capacity. India and South Korea, ranked respectively fourth and fifth in global steel production, have imposed 'anti-dumping' duties to repel Chinese imports.
Nevertheless, it seems that China's enormous appetite for steel has sustained Australian growth over the past decade. Australia is the world's biggest exporter of iron ore - main ingredient in steel production. Perhaps, those 'fat years' are virtually over due to a steady decrease in Chinese investments. Iron ore prices are almost two-thirds lower than two years ago, although Australia had assumed that China would sustain its ultra-fast growth. Regardless, Australian miners have less to fret about than do steelmakers in Japan, India and South Korea. As steel prices fall, Australia's biggest mining companies are using their high-quality, low-cost iron ore to take a bigger slice of the global market.
The demand for steel in India and Southeast Asia has already increased despite being far from enough to replace the Chinese shortfall. Clearly, the declining value of Australian exports has become a drag on growth as mining companies cut costs and cancel projects. The eventual impact on the economy could be even worse.
Today, India is the fourth-largest steel producer in the world as well as the world's largest producer of Direct Reduced Iron (DRI) or sponge iron. The steel sector contributes nearly 2.0 per cent of the country's gross domestic product (GDP) and employs over 600,000 people. With $607 million investment per million tonne of additional capacity, the steel sector is expected to witness an estimated investment of $132 billion by 2020. Besides, India continues to be a low steel-consuming country at only 60 kg per capita compared to the international average of 216 kg. Despite the low consumption, India's per capita consumption of total finished steel has risen from 51 kg in 2009-2010 to around 60 kg in 2013-2014 - this indicates a huge growth potential for the country's steel industry. This year, India's import of iron and steel has risen at 58 per cent while making it the country's sixth-largest import.
Meanwhile, the Organisation of Economic Cooperation and Development (OECD) has cautioned of growing risks to the international steel market. While global demand for steel would continue to expand favourably, growing economic risks associated with housing market and other problems partially cloud the outlook. Rising capacity expansions could impact on the price if demand growth slows down significantly. Since the capacity expansion continues to exist, trade friction to the detriment of the steel industry's productivity has been indicated - due to an abrupt slowdown in global demand.
Dr. B. K. Mukhopadhyay is the Principal of Eminent College of Management and Technology at West Bengal University of Technology, India; a noted management economist and an international commentator on business and economic affairs.
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