Posted on 16 Jul 2021
The global supply chains of steel industry will be significantly adjusted in the coming years by the commitments of many countries and steel producers to achieve low carbon and then carbon neutral in economies and steelmaking, Graham Gus Nathan, director of the Centre for Energy Technology, shared on July 13 at SGX’s Singapore International Ferrous Week, a three-day event.
So far, many countries and steel companies have vowed to realize carbon neutral by 2050, which will lead to about $7 trillion investment globally over 2015-2040 to make the transition in the heavy industry viable, and the global supply chain of iron ore and steel will be largely impacted in the transition period, he shared. Nathan is also the deputy director of the Institute for Mineral and Energy Resources, University of Adelaide.
Undoubtedly, the upstream suppliers in the steel industry will face various challenges and higher costs, but “it is now clear that customers are prepared and willing to pay the difference of prices arising from supplier’s higher costs, as the cost of decarbonising is small relative to the final product,” he added.
Among all the changes, the probable shift from blast furnaces to electric arc furnaces in steelmaking will boost the demand for high-quality ferrous feeds to save power, while for integrated steel mills, their demand for higher-grade iron ore such as pellets, direct reduced iron, hot briquetted iron and pig iron will increase, as all these will result in less energy consumption and low net carbon dioxide footprint, according to him.
Meanwhile, the ‘green’ steel production via hydrogen as energy has been largely demonstrated and will have a huge influence on the global supply chain too, as this will propel the steel producers to explore the new combination of iron ore and hydrogen and how to reduce cost in hydrogen production, transportation and storage, as hydrogen is still rather expensive compared with coal, he suggested.
Also, “there are some certain regions with high availability of renewable electricity resources generated from solar and wind systems, and these regions potentially have lower costs of producing hydrogen,” he said, adding that the costs can be saved greatly for steelmakers to produce steel at these regions if they intend to use hydrogen to achieve low-carbon targets.
Furthermore, the low-carbon transition will also incentivize producers to use alternative low-carbon construction materials as substitutes of cement, as the latter emit a lot of carbon dioxide, and such new construction materials can be derived from slags from iron ore and steelmaking, he added.
Source:Mysteel Global
