Posted on 19 Dec 2022
The Singapore International Ferrous Week (SIFW) was held at the Sands Expo and Convention Centre on 17 May 2022. SIFW 2022 presented an avenue for industry discussion on the move towards the green economy, the state of the art of steel making and the impact on the value chain.
The forum provided insights on factors that shaped the iron ore sector during the Covid endemic period.
Iron Ore
The transition into endemic phase of Covid-19 has changed the global environmental trends in shaping the iron ore sector. Steel capacity in Southeast Asia has risen following the extra capacity from Chinese investment led by the blast furnace route.
Surge in Chinese Steel Exports in 2022
The loss of Black Sea steel exports on the seaborne market and European production will lead to increase in price of Chinese steel.
Lockdown in China
China’s Covid lockdown in March 2022 had disrupted the global supply chain. When the economy finally reopens, it will create a pent-up demand for steel products which will lead to an increase in the price for steel.
Russia-Ukraine War
The on-going Russia-Ukraine war has disrupted the supply chain and has led to a rise in material prices including steel. The cost of living in the world has also increased. Soon, exchange rate fluctuations will occur, further contributing to risks in global growth and consumption of metals. It is expected steel prices will not decrease even after the Ukraine-Russia war ends.
New Technology to Control Pollution
The iron and steel industry is responsible for 7% of the global carbon emission. Steel companies around the world are working towards new technologies to control the level of pollution. For instance, Vale S.A, a Brazilian company which engages in metals and mining has its own dedicated funds for technologies, initiatives and research and development to reduce the level of carbon in the atmosphere. By 2050, companies in Southeast Asia are expected to reduce carbon neutrality especially in the seaborne market.
Decarbonizing the global shoreside economy will result in the shipping industry contracting. This is because the focus on green technology will dispense with the need to transport coal for the blast furnaces via ships.
Ways to Minimize CO2 Emissions
CO2 emissions can be minimised through: -
i) Improvements towards energy efficiency and increase in scrap collection.
ii) Allow for more scrap-based production.
iii) Electric steelmaking utilized to achieve carbon neutrality.
The Future of Steel Landscape
Green iron is the next important technology. Producers must begin to think on new locations as many ironmakers are not located where green energy can be optimized. The future steel landscape will be dominated by the electric arc furnace (EAF). Steelmakers should minimize the usage of blast furnace and instead turn to electric steel making.
Conclusion
In the race to achieve zero carbon by 2050, concrete steps must be taken now as time is running out.
Sources:
1https://www.woodmac.com/news/opinion/southeast-asias-steel-surge-how-will-the-region-manage-overcapacity/
2Panel Discussion, Singapore Iron Ore Forum 2022
Source:SEAISI
