With FABTECH 2024 in Orlando, Florida, fast approaching (Oct. 15–17), many in the steel industry are expected to attend. Some will be part of the manufacturing side of the iron and steel sector, some will be involved in fabrication, and others part of steel service centers.

So, how is the industry doing as a whole as it faces a raft of changes?  
• Stiff environmental regulations and responsibilities
• The arrival of artificial intelligence (AI)
• Changes in the U.S. manufacturing sector and supply chain
• Changing availability of materials

Clearly, the steel industry is experiencing a period of disruption. A great many changes have affected prices and product demand. Growth suffered badly during the Covid-19 years. World crude steel production fell badly in 2020, then rose by 4% in 2021.

However, Market Research Future predicts that the industry’s future is bright. By 2023, the market was valued at $1,787.45 billion and projected to grow from $1,826.59 billion in 2024 and sustain an annual growth rate of 3.47% until 2032.

Renewables and decarbonization affect steel demand

All industries are under pressure to reduce emissions and contribute to decarbonization. But the iron and steel industry is under more heat than most other verticals. It’s in the crosshairs of environmental groups and politicians because it accounts for 2.6 gigatons of carbon dioxide emissions annually. That amounts to 7% of the global total—more than all worldwide road freight, more than all of Russia, and more than the entirety of the European Union.

The tightening of environmental regulations is just one of the factors that have made life difficult for the U.S. iron and steel industry in recent years. Nevertheless, the U.S. remains third in the world, behind India and China, in producing raw steel, with 88 million tons per annum (MTPA) of steel. It’s also the sixth-largest producer of pig iron, with 29 million metric tons of pig per annum. Major steelmakers in the U.S. include Cleveland-Cliffs, Carpenter Technology, Commercial Metals Co., Nucor, Steel Dynamics, and U.S. Steel.

According to McKinsey, factors that are helping the steel industry rebound include the Inflation Reduction Act (IRA) signed in August 2022. It’s positively affecting steel demand in areas related to the energy transition. About 40 metric tons per megawatt (MW) of finished steel are needed for solar, and 150 metric tons per MW for wind. That’s a lot of steel when you consider that about 460 gigawatts (GW) of new-build renewable generation is scheduled to begin construction during the next five years. That’s 94% of all new generation, according to Industrial Info Resources. The IRA is directing about $369 billion of federal funds into renewable energy in the coming years. The steel industry will be a major beneficiary. 

Low CO₂ steel

McKinsey believes global demand for low-CO₂ steel will grow tenfold during the next decade. That’s a rise from 15 million metric tons in 2021 to more than 200 million metric tons by 2030. By the end of the decade, it will represent more than 10% of total steel demand and is predicted to account for 25% of demand by 2040.

It’s expected that direct-reduced iron (DRI) and obsolete scrap will become a substitute for carbon-intensive hot metal or pig iron from blast furnaces in some markets. McKinsey thinks demand for decarbonized steel products will outstrip supply by more than 100 MTPA by 2031. Those producing or selling it via steel service centers can expect high premiums based on its availability.

One type of DRI gaining traction is hot-briquetted iron (HBI). It’s an environment-friendly alternative to scrap and imported pig iron. Natural gas-based HBI is being used in some U.S. blast furnaces as a way to shrink the carbon footprint of steelmaking. It increases productivity while reducing the amount of coal or coke needed in the process. HBI is basically a premium form of iron compacted at a temperature of 650°C or more. It has a density of 5,000 kilograms or more per cubic meter. 

At one Cleveland-Cliffs facility, for example, iron ore is fed into the top of a 450-ft furnace and subjected to process gas that helps to strip out the oxygen. The material coming out of the bottom of the tower is reduced further and put through a briquetting machine to be sent to blast furnaces across the U.S. to be made into steel. Because the briquettes have a far lower surface area than what is produced by traditional processes, there’s far less oxidization.

About 30% of HBI produced is used across the automotive supply chain. Other major use cases are in plating for wind towers and steels for electricity transmission and solar arrays. 

Steel service centers must adapt 

Steel producers sell material in bulk to large customers. But most small and medium-size enterprises (SMEs) rely on the network of steel service centers that exists throughout North America. These centers buy good quality steel from large manufacturers and resell it in smaller quantities to customers. Many steel service centers also process the steel, for example cutting it to a size or shape specified by the fabricator or customer.

According to Metal Center News, the top 50 service-center companies in North America employ 63,500 people and reported sales of $85 billion in 2023, a jump of more than $7 billion from the prior year. Clearly, this is a vibrant and expanding sector of the economy. However, steel service centers across the U.S. should apprise themselves of shifting market conditions and adapt to the winds of renewable and decarbonization change. Customers will be demanding DRI-based steel more and more. Many will be willing to pay more to obtain it.

Among the biggest steel service centers in North America are Reliance Steel & Aluminum, Ryerson, Kloeckner Metals Corp., Worthington Industries, Russel Metals, Steel Technologies, Toyota Tsusho America, O’Neal Industries, Alro Steel, Dodge Center, Samuel, Son & Co., thyssenkrupp Materials, Coilplus, Century Metals & Supplies, Galvaprime S.A. of Mexico, M. Castle & Co., Trident Steel Corp., Kenwal, Esmark, NIM Group, Target Steel, and Wieland Metal Services. But there are hundreds of smaller ones throughout the region, each key to the success of the manufacturing and fabrication sector.

Contributing to a bright future for steel producers and users

The efforts of steel producers, the dedication of steel service centers, and the tireless efforts of fabricators across North America have contributed steadily to the health, prosperity, efficiency, and sustainability of the iron and steel sector over the past many decades. Since 1990, the industry has reduced its energy intensity by 35%, and greenhouse gas (GHG) emissions intensity by 37%. Labor productivity in the U.S. has seen a fivefold increase since the early 1980s, going from an average of 10.1 man-hours per finished ton of steel to an average of 1.9 man-hours per finished ton of steel in 2022.

The industry has demonstrated time and again its willingness to adapt with the times and adopt the latest technologies. That is why shows like FABTECH 2024 are so vital to manufacturers and fabricators. The event showcases the latest techniques, technologies, and successes from across the industry. 

Register today for FABTECH 2024, Oct. 15–17, in Orlando, Florida.

Published Sept. 12, 2024, by FABTECH Expo.