Steel Industry is one of the widely known industries that reflects the overall market conditions. For instance, demand may increase during an economic boom, and it may reflect slower growth during recessions.
When it comes to the steel industry, several challenges are there starting from manufacturing to the recycling of steel. Steel industry per se has enormous demand globally which makes it more challenging to fulfil that gap.
There exist several countries that export steel, China being the dominant one exporting 50 % of the world’s steel requirement. Today, we will discuss the challenges and opportunities associated with the steel industry. Starting with the challenges initially.
- Excessive Growth in Demand
With several countries moving towards infrastructural development, the global requirement of steel has increased exponentially. In addition to unstable structural issues, volatile financial markets keep deciding the requirement of steel over the years. This poses a challenge upon the steel manufacturers or the wholesale steel suppliers for fulfilling these requirements.
- Depletion of High-Grade Raw Materials
The production of steel to meet the high requirement has caused depletion of the high-grade raw materials. This has compelled manufacturers to go for low-grade materials. Using low-grade materials is not only a challenge but also harmful to the environment in several ways.
- Solid Waste Management
Manufacturing of steel involves the production of solid wastes while processing raw materials through various processes. But often steel manufacturers tend to ignore how solid wastes include different valuable products and can be reused economically.
- Price Volatility of Raw Materials
The fluctuation of raw material prices is significant in recent years. This has put considerable pressure on the margins of the steel manufacturers. While controlling the prices, cost-cutting can lead to production cuts in some circumstances.
Opportunities Associated with The Steel Industry
- Carbon Capture and Storage
With carbon capture and storage technology, it is easy to capture 90 % of CO2 being emitted into the environment. The captured CO2 is then compressed through high pressure converted into a rock formation site. This seems to be a highly effective way of preventing CO2 emissions.
- Process of Hlsarna
Based on bath smelting technology, Hlsarna seems to be a new iron making process. It can directly melt the iron ore and coal into a reactor, eliminating the BF route to produce liquid iron. This process requires less use of coal and helps in reducing the amount of CO2 emissions.
- Electrolysis
By replacing the BF technique with the electrolysis, this method helps in preventing emissions of CO2. In the conventional electrolysis method, iron ore can be dissolved in a solvent at a high temperature, and when the current is passed through it, it leads to ionization. Iron is then deposited near the electrode in the reactor. Through this method, iron is produced in a completely different way.
- Make use of Hydrogen instead of Carbon
Making use of hydrogen instead of coal during conventional BF route processes seems to be an effective way of eliminating CO2 emissions. Hydrogen is a productive reducing agent, and by alternating carbon with hydrogen, there is a massive potential of diminishing GHG emissions.
These opportunities are just a few of the many that are available in the steel industry. By adopting environment-friendly measures, the industry can watch for opportunities in trade, investment, export support mechanisms, along with strengthening bilateral trade.