As we step into the year 2025, it is crucial to take a look back at the significant events that shaped the steel industry throughout 2024. By doing so, we can gain better understanding of the emerging trends, be able to analyze the underlying driving factors, and know how to best adapt to the changing dynamics of the industry in 2025.
Event Highlights of Steel Industry in 2024
Below is a summary of key events in the steel industry in 2024.
Green Steel Transformation
In 2024, significant global efforts were made to advance green steel production, aiming to reduce the steel industry's substantial carbon footprint. Key developments included:
Technological Innovations
- Electrochemical Processes: Companies like Electra in Colorado introduced novel electrochemical methods powered by renewable energy to produce iron at lower temperatures, significantly reducing emissions (according to Time USA LLC, November 2024).
- Hydrogen-Based Production: Swedish firm H2 Green Steel initiated plans for a large-scale facility in Sweden, set to commence operations by 2026. This facility aims to utilize green hydrogen produced with renewable electricity, potentially reducing carbon emissions by 95% compared to traditional methods (according to CNN, June 2024).
Policy and Regulatory Measures
- India's Green Steel Mission: India announced plans to launch a National Green Steel Mission by December 2024, aiming to promote sustainable steel production. The initiative includes defining green steel products and reallocating approximately 30 billion Indian rupees ($356.8 million) to support green steel production (according to Global Steel Web, October 2024).
- EU's CBAM: Carbon Border Adjustment Mechanism, or CBAM, issued by EU become more prevalent. CBAM, which imposes carbon pricing on imports from countries with less stringent environmental regulations, provides an added incentive for worldwide manufacturers to adopt greener technologies to remain competitive in global markets.
Industry Investments
- UAE's Green Steel Project: Emsteel, in collaboration with renewable energy company Masdar, completed a pilot program exploring the use of green hydrogen to decarbonize steel production. This aligns with the UAE's National Hydrogen Strategy 2050 and the Abu Dhabi Low Carbon Hydrogen Policy (according to AGBI, October 2024).
Fluctuating Raw Material Prices
In 2024, global steel prices experienced notable fluctuations, driven by a combination of geopolitical tensions, economic challenges, and supply chain disruptions. Here’s a description of how these global events impacted steel prices:
- Middle East Conflicts (Israel-Hamas, Hezbollah, Houthi): The escalation of the Israel-Hamas conflict and involvement from Hezbollah and Houthi fighters in late 2024 had a ripple effect on global steel markets. As the Middle East is a key region for energy and raw material exports, these conflicts caused uncertainty in oil prices and disrupted supply chains, leading to increased production costs for steel manufacturers. Steel prices in regions heavily dependent on imports saw upward pressure as a result.
- Syria and North Korea Tensions: Political instability and conflicts in Syria and the Korean Peninsula further exacerbated global supply chain issues. These regions are vital for the transit of raw materials and energy resources, and disruptions here led to higher costs for steel producers worldwide, particularly in Asia.
- Energy Crisis and Raw Material Prices: The ongoing energy crisis in Europe and Asia caused disruptions in the supply of key raw materials for steel production, such as coking coal and iron ore. As energy prices spiked due to supply constraints and geopolitical instability, steel producers faced higher input costs, leading to price volatility. While this could push prices higher in the short term, the economic slowdown dampened overall demand.
Digital Transformation in Steel Industry
Automation and AI Integration
- Artificial Intelligence (AI): Steel producers increasingly adopted AI and machine learning algorithms to optimize production processes. AI was used for predictive maintenance, quality control, and improving energy efficiency. By analyzing real-time data, AI systems helped detect potential equipment failures before they occurred, reducing downtime and improving operational efficiency.
- Automation: Robotics and automation technologies became integral in steel production, from material handling to the finishing processes. Automated systems in blast furnaces and rolling mills improved precision, speed, and safety, reducing labor costs and human error.
Internet of Things (IoT)
- IoT Sensors: IoT sensors were widely deployed in steel plants to monitor and control production in real-time. These sensors provided valuable data on temperature, pressure, and material flow, enabling manufacturers to optimize production parameters and minimize waste.
- Smart Factories: The concept of smart factories continued to evolve, where interconnected devices and systems communicated seamlessly to improve operational efficiency. Data collected from IoT sensors allowed for dynamic decision-making, increasing the responsiveness of steel plants to market and production demands.
What to Expect in 2025?
Based on current events and trends, the steel industry in 2025 is likely to be influenced by several key factors:
Transition to Green Production
Steel manufacturers will continue to invest in carbon emission reduction technologies, such as hydrogen-based steelmaking or utilizing renewable energy in production. This is driven by increasingly stringent environmental regulations and customer demand for sustainable products.
Supply Chain Restructuring
Geopolitical tensions and global market fluctuations compel steel companies to diversify their raw material sources and develop more flexible supply chains to mitigate risks from economic shocks.
Increased Automation and Digital Technology
Artificial intelligence (AI), big data, and the Internet of Things (IoT) will continue to be applied to optimize production, enhance inventory management, and more accurately forecast market demand.
Ongoing Fluctuations in Raw Steel Material Prices
The year 2025 may see instability in the prices of iron ore, coking coal, and HRC due to the impact of the global economy, mining output, and environmental protection policies in major mining countries.
Conclusion
Above, we have provided an overview of the steel market summary for 2024 and shared our perspectives into the steel industry's future landscape in 2025. This is intended to help you better anticipate the changes and challenges you may face in the coming year, allowing you to mentally prepare and adapt to the evolving environment.
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