Download - Steel as the Backbone of the Modern Economy
Nae Hee Han
LCA AND STEEL Seminar, Beijing, 19 July 2012
Steel as the Backbone of the Modern Economy
19 July 2012 2
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July 19, 2012 3
Content
Steel as the Backbone of the Modern Economy
Evolution of World Steel Production and Use
A Glance at the Chinese Steel Industry
Future of Steel – Challenges and Answers
Steel as Backbone of the Modern Economy
Steel was the key driver of the Industrial Revolution:
steel is essential in transport, construction, power
generation, machinery
Steel is the most widely used material in modern
society thanks to its unique combination of strength,
formability and versatility - steel is everywhere in your
life
Steel is a key material needed for industrialization and
urbanization, hence strongly associated with status of a
nation’s economy. Often times, steel industry is a
barometer of the economic health of a nation
July 19, 2012 4
Economic Development and Steel
Stages of Steel Use
per Capita
1. Very low level before
economic take-off
2. Rapid rise
3. Leveling off
4. Decline
5. Stabilization
5
Dynamic Relationship between GDP per Capita
and Steel Use per Capita
Source: worldsteel
Steel as Basis for Economic Take Off
July 19, 2012 6
Steel Use per Capita vs GDP per Capita in Different Countries
Emerging Economies: Engine of Growth for Steel
July 19, 2012 7
Source: worldsteel, Global Insight
Note: for 1982-1990 share of emerging in GDP does not include former USSR and some
countries of Eastern Europe
Collapse
of USSR
Emerging Economies’ Share in World GDP vs Steel Use
Steel as Barometer of Economic Strength
July 19, 2012 8
Per Capita Steel Use
0
100
200
300
400
500
600
700
800
900
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Japan
530
China
460
US290
kg
Per capita crude steel use
Steel Using Sectors
Construction
Mechanical Machinery
Metal Products
Automotive
Other Transport
Electrical Equipment
Domestic Appliances
July 19, 2012 9
Source: worldsteel
World, 2011
10
Steel Using Sectors
Source: worldsteel
Emerging, 2011 Advanced, 2011
Evolution of World Steel Demand
July 19, 2012 11
1951-1974:
CAGR: +5.6%
1975-1999
CAGR: +0.5%
2000-2007
CAGR: +6.8%
Apparent Crude Steel Use (1950-2011)
Source: worldsteel
Source: worldsteel
12
Shifting Centre of Gravity World Crude Steel Production, 1950 World Crude Steel Production, 1975
World Crude Steel Production, 2001 World Crude Steel Production, 2011
The China Phenomenon
July 19, 2012 13
World Developed China Other Emerging
1990-2000 115 75 71 -31
2001-2007 447 59 260 128
2008-2011 155 -54 177 32
Contribution to Steel Demand Increase ( ∆ Mt)
0
100
200
300
400
500
600
700
1950 1960 1970 1980 1990 2000 2010
0%
10%
20%
30%
40%
50%
China csp China's share in world csp
Mt
World No.1
Driving Forces of China’s Steel Growth
From 2000s: steel Intensive growth driven by
investment and urbanization
July 19, 2012 14 Source: worldsteel, Global Insight
China’s steel demand drivers
New Phase of the Chinese Steel Industry
End of steel intensive growth era
From construction and investment driven to
consumption driven
Shifting steel demand Driver
Inland provinces will derive steel demand
Motorization and Newly emerging sectors will be
demand driver
Sustainability Challenges
July 19, 2012 15
0
5000
10000
15000
20000
25000
Sha
ngha
i
Tian
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Bei
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Jian
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Zhej
iang
Gua
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Sha
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Heb
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Hub
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Cho
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Hen
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Xin
jiang
Sha
anxi
Sha
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Hai
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Hun
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Qin
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Nin
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Sic
huan
Gua
ngxi
Anh
ui
Jian
gxi
Tibe
t
Yun
nan
Gan
su
Gui
zhou
PPP$
19 July 2012 16
Multi Speed Growth within China
Group B Group C Group A
Population
55.6 mln Population
370.1 mln
Population
647.4 mln
Group D Population
259.8 mln
Shanhhai
Tianjin Beijing Xinjiang
Gansu
Xizang
Qinghai
Sichuan
Nei Mongol
Yunnan
Heilongjiang
Jilin
Liaoning
Ningxia
Shaanxi
Shanxi Hebei
Shandong
Henan
Hubei
Guizhou Hunan
Fujian
Guangdong Guangxi
Hainan
Jiangsu
Zhejiang
Jiangxi
Anhui
Source: worldsteel, Global Insight
Regional Shift in China’s Steel Demand
China’s Provincial Development Pattern: ACSU/cap vs GDP/ cap
July 19, 2012 17 Source: worldsteel, Global Insight
Motorization in China
The automotive market in China has taken off
July 19, 2012 18
Stage2-1
Popularization
Stage1
Incubation
& Take Off
Stage3
Maturity
Stage2-2
Popularization
Growth rate:
0~5%
China now
Pass. C
ars
per 1
000 p
eo
ple
19
China’s Emerging Strategic Sectors
Future of Steel - Challenges
Rebalancing in the developed world, China’s slow
down: New growth engine?
Environmental regulations
Decreasing steel intensity
Inter-material competition
July 19, 2012 20
0
500
1000
1500
2000
2500
3000
1870 1890 1910 1930 1950 1970 1990 2010 2030 2050
July 19, 2012 21
215
506
35
460
310
234
57
285
123
Africa India Brazil Middle
East
US EU China Japan World
Future of Steel – Answer
Steel demand will continue to grow to meet the need of
human civilization in the emerging and developing world
World Steel Production Per Capita Finished Steel Use
2011, kg Mt
Steel will continue to remain the backbone of the
economy by providing solutions to the sustainability of
the future economy - lighter vehicles, renewable energy,
energy conserving machinery, etc…
July 19, 2012 22
Growth of Wind Energy in Europe
Future of Steel - Answer
Future of Steel – Answer
A new thinking is emerging
Think “Value”, not just Volume
Think “Sustainability” and “LCA”
July 19, 2012 23
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