Is the Steel Industry Well Positioned for a Major Comeback?

Image Credit

The demand for steel and steel products has enjoyed notable peaks in the past, with the burst in industrial activity by the end of the 20th century being a momentous phase in the expansion of the industry. The most critical players in this expansion were the increase in the value of manufactured goods and the complexity and number of construction projects. Technological advances and major inventions of the century also increased the utilization of steel.
This steel industry has since been growing steadily, even amidst economic recessions. Currently, market projections point at a 0.7% compound annual growth rate over the next six years up to 2027, as Report Linker reports. This growth further indicates the steel industry’s resilience to global issues and its dexterity to adjust accordingly for perpetual relevance.
Banking on other industries
Ideally, nearly every other industry depends on the steel industry. For some, like the automobile industry, the dependence is direct, especially for processed steel. On the other hand, others, like the energy industry, rake in huge revenues from the indirect symbiotic relationship with the steel industry. That is from steel processing and manufacturing being a major consumer of power.
The case for steel machining and structural solutions
Additionally, the energy sector is a major buyer of large-diameter stainless steel pipes for exhaust systems. These pipes also draw numerous applications in the chemical manufacturing and food-grade processing plants. Typically, that’s because these pipes are resistant to weather elements and harsh chemicals; thus, they do not introduce contaminants to the fluids they convey.
The equipment and machinery sector equally depend heavily on steel in making parts and products for other industries. Medical equipment is a specialized group here, with the demand for sterile products on the rise, making steel the most appropriate material to use.
Readjusting for continual growth
The global impact of the COVID-19 pandemic on construction has negatively impacted the consumption of steel. Construction is currently at a revised negative compound annual growth rate of 0.3% over the six-year period up to 2027. The transport sector is also at a significantly low CAGR, at 1.8%.
Having that the success of the steel industry pegs heavily on transportation, with about a 16% market share, industry stakeholders must make critical adjustments for continual growth. Among these adjustments must include stakeholder collaboration, technology integration, and lean marketing.
Conclusion: Contribution to the national economy
Large industries, such as automobile, transport, construction, and machinery, have a massive influence on the success of steel markets. Here, large-diameter stainless steel pipes, steel rods, plates, and flat bars, coils, and sheets are among the main products. However, the continual growth of the industry will depend on how well other smaller dependent industries utilize steel and steel products.
It is the national economy, together with micro-economies of individual stakeholders of the steel industry, which is at stake here. Therefore, a call for stakeholder collaboration, technology integration, and lean marketing structures is indispensably critical. As it has been in the past decades, the global steel market will remain resilient enough to brave the negative impact the COVID-19 has had on the industry. Calculated adjustments are, however, amust toposition the steel industry for a significant comeback.

Company Care: How Businesses Are Prioritizing Their Employees during the COVID-19 Crisis

Next Story »

How to Build an Effective Modeling Portfolio

Leave a comment

Your email address will not be published. Required fields are marked *