Intern reporter Yang Yue reports

In the next few decades, the 'big trends' will largely change the global economic and social development pattern. Urbanization, technological progress, and climate change are typical' big trends' that are expected to reshape the future of the global steel industry, Provide a brief analysis of the impact of the "big trend" on downstream steel demand. In February 2021, the World Iron and Steel Association established the "Megatrends Evaluation Expert Group" to gain a deeper understanding of the concept of "big trends" and explore how "big trends" will reshape the global economic and social development pattern and the future of the global steel industry. People generally believe that a 'major trend' should meet three conditions: long-term, widespread, and significant impact. This means that a 'major trend' should last for at least a few decades and should drive certain global fundamental changes. "Barris said that the" Expert Group on the Evaluation of Major Trends "has explored five" major trends "that affect the development of the global steel industry:Firstly, population and social changes, Especially with sustained population growth, aging population, and the expansion of the global middle class; The second is urbanization, which is the current worldwide trend and the inevitable trend of social history development; The third is the "big trend" related to the environment, especially the "big trend" related to climate change; The fourth is geopolitics, which is characterized by a slowdown or even regression in the process of global economic integration, and the related influence is shifting from developed economies to developing economies; The fifth is technological progress, which has always been one of the main forces of change in the global historical development process. Thanks to the stronger data storage and processing capabilities of contemporary society, the disruptive impact of technological progress on social development is also greatly increasing.

Sustainability has become a new "big trend"

Barris stated that the world's major economies have realized the importance of accelerating the transition towards greenery and intelligence, and have actively formulated new development visions and governance strategies for this purpose. He has also released increasingly detailed green development roadmaps, advocating for promoting effective resource utilization, restoring biodiversity, and reducing environmental pollution. For example, the European Green Agreement, the US Infrastructure Plan, etc. These can all indicate that sustainability is a new "big trend" that requires the steel industry to continuously improve its ability to cope with climate change and other issues.

"The world's major economies are committed to improving productivity, creating employment opportunities, and striving to make rapid progress in addressing climate change. At present, the world's major economies are gradually increasing their investment in clean energy and green infrastructure construction, encouraging strategic industry sectors such as electric vehicles and semiconductors to actively issue relevant action plans to ensure the stable supply of strategic and key materials globally." Barris said, In addition, relevant data shows that in 2020, Generation Z (usually referring to the generation born between 1995 and 2009) The workforce only accounts for about 6% of the global workforce, but it is expected to expand to over 30% by 2030. By 2030, the total proportion of the Z-generation and millennial labor force is expected to reach around 75%. This indicates that the role of the new generation of young labor force in society will rapidly increase throughout the 2020s, and intergenerational changes in consumer preferences may lead to fundamental changes in goods and services, production, and consumption, such as the continuous shift from private ownership to a shared economy (shared bicycles, carpools, shared apartments), as well as the shift from a linear production model to a more circular production model

The pressure on sustainable development in the construction industry is increasing.

Barris stated that the construction industry is one of the industries with high carbon dioxide emissions and is facing increasing sustainable development pressure.

As the pressure for sustainable development increases, we believe that the construction industry will accelerate the digital pace of the construction process. Although prefabricated components and modular structures will show an increasing trend in the construction market, it is expected that prefabricated components and modular buildings will continue to occupy a small share of the entire market. We cannot conclude that the construction of multi-story residential buildings using reinforced concrete will lose its dominant position in the construction market Barris stated that steel and cement will continue to be the main materials in the construction industry, while wood and other new products, such as bricks made from waste, may occupy some market share. However, the construction industry requires materials with high capacity, low cost, and high performance. Steel and cement can meet these requirements, while all other building materials, including wood, are subject to severe volume, cost, or performance limitations. Barris predicts that the future changes in material demand in the construction industry will mainly revolve around the keywords of "low-carbon", "recyclable", and "second-hand". We believe that low-carbon steel will become one of the key factors in alleviating the pressure of sustainable development in the construction industry. The relevant research results on the mid-term steel demand in the construction industry indicate that in the coming decades, infrastructure construction activities are expected to burst into strong vitality, and the demand for steel in the construction industry will significantly increase. As infrastructure construction investment is a part of steel intensive economic activities, it can be expected that there will be higher activity in the future Infrastructure construction will support the growth of steel demand in the coming decades. In addition, as a user group with a large and growing demand for steel products, the growing demand for low-carbon products in the construction industry will become one of the important driving factors for the low-carbon transformation of the steel industry. The digitization of the construction process in the construction industry will also accelerate the digitization process of the steel industry and its products, ultimately achieving the digitization of the entire steel value chain. At the same time, the increasing demand for circular and flexible building design will promote the steel industry to continuously innovate product solutions, optimize product durability and recyclability.

The transformation of the automotive industry towards "steel demand" growth is transmitting pressure

Barris pointed out that the automotive industry is currently at an important node of paradigm shift (i.e. a change in cognitive patterns). The paradigm shift in the automotive industry is driven by three waves of change. The first wave is a continuous transition towards shared mobility. The automotive industry is moving from private vehicle based mobility (mobile as a product) to mobile applications based on mobile car hailing and carpooling services (mobile as a service) Transformation. At present, the mobile service volume of these applications is showing explosive growth and rapidly occupying a significant share in the mobile market in multiple important cities around the world. This reflects the comprehensive impact of several 'major trends' mentioned earlier on the automotive industry. The second wave is electrification and the replacement of internal combustion engine technology with electric vehicle technology. According to relevant data statistics, in 2021, the proportion of electric vehicles in global light vehicle sales reached 8% to 9%. In the remaining period of the 2020s, it is expected that regulatory pressure and intergenerational changes in consumer preferences for electric vehicles will further boost this trend. The third wave is the development of autonomous vehicle technology. It is expected that this wave will vigorously promote the intelligent transformation of the global automotive industry and mobile systems around the world starting from the mid-1920s. The emergence of autonomous vehicle may lead to new changes in vehicle design, vehicle passenger demand and manufacturing material requirements. " He said. What impact will the significant changes in the global automotive industry have on steel demand? Barris said that according to the global light vehicle sales forecast report by IDTechEx, a well-known research company in the UK, global light vehicle sales will increase from around 80 million units to over 100 million units by 2030. It is expected that the main driving force for the growth of this demand will come from developing countries with large populations and low motorization rates, such as India. This is a reasonable prediction and a good omen for global steel demand. Many industry experts believe that by 2030, the proportion of electric vehicle sales can reach around 30%, "said Barris.

"The biggest factor affecting the future steel demand of the automotive industry will be autonomous vehicle." He said, "IDTechEx predicts that the sales volume of Level 3 autonomous vehicle will reach about 30 million by 2030, and the sales volume of Level 4 autonomous vehicles will also increase. It is worth noting that many other industry experts have a negative attitude towards the sales prospects of autonomous vehicle. Therefore, the level of sales volume of autonomous vehicle may reach by 2030 is controversial. However, most experts believe that 'mobile as a service' and Autonomous vehicle will occupy the majority of the global automotive market in a certain period of time. "

Barris said that relevant data showed that with the popularity of autonomous vehicle and the decline of Volkswagen's demand for private cars, global car sales were expected to decline from the mid-1930s. Therefore, starting from the mid-1930s, the growth of steel demand in the automotive industry will face challenges. Although steel will still be the raw material for chassis and body parts of autonomous vehicle, steel manufacturers may face fierce competition in the field of materials for other parts of automobiles. With the continued impact of the first wave, vehicle lifespan will be measured by mileage rather than years. Automotive manufacturing materials need to withstand significant mileage pressure throughout the vehicle's lifespan. In addition, the more stringent performance requirements of electric vehicles will also have a positive impact on steel product innovation.

"Lightweight vehicle bodies have already transmitted pressure to steel manufacturers and will continue for a period of time," Barris said, The relevant regulations formulated by governments around the world regarding carbon emissions throughout the entire life cycle of automobiles, as well as the increase in battery energy density and manufacturing costs, are tilting the market towards steel materials. The additional costs brought about by battery cladding materials and other new technologies will also increase the cost pressure on automobile manufacturers. This will improve the competitiveness of steel compared to other alternative materials. Although alternative material manufacturers are increasing their investment in this area In order to further penetrate the automotive market, most of these alternative materials are limited by serious factors such as cost, volume, safety, or environmental impact. We believe that steel will maintain its position as the preferred material in the automotive industry and maintain its absolute leading advantage in cost. Therefore, it can be speculated that by the middle of the 1930s, the automobile industry has a positive prospect of steel demand, but since the middle of the 1930s, with the rapid penetration of autonomous vehicle into the market, we will face more and more challenges. This challenge includes continuously meeting the growing demand for low-carbon materials in the automotive industry

"Downstream industries are undergoing rapid transformation. This reminds us to be prepared for fundamental changes in product design and material requirements that are about to occur." Barris suggests that in the face of a series of changes, the global steel industry should do the following: firstly, study the "big trends" of steel users in design and material requirements, as well as the potential impact on the market position of steel products; Secondly, continue to invest in the development of new products, processes, and solutions to help downstream users actively respond to the challenges they face; Thirdly, invest in the development of necessary digital tools to enhance the sustainable development potential of steel products; Fourthly, focus on using the strategic tool of full lifecycle assessment to demonstrate the excellent environmental performance of steel products; Fifth, actively provide targeted solutions to downstream users in collaboration; Sixth, establish partnerships with material supply industries with market competitiveness to develop new high-performance multi material solutions that better meet the constantly changing material needs of downstream users; Seven is to establish connections with new market entities and showcase the important advantages of steel in helping them cope with key challenges.