Introduction

Megatrends are powerful, sustained forces. While their impact might not be felt in the short-term, over decades they transform the global social and economic landscape in a major way. Urbanisation, technological progress and climate change are typical examples of megatrends that are also expected to shape the future of the global steel industry.

In February 2021 worldsteel set up the Megatrends Evaluation Expert Group to develop a deeper understanding of megatrends, how they are expected to shape the global socioeconomic landscape and the future of the global steel industry.

The trends

We considered the dynamics of five megatrends on the steel industry:

• Demography and social change, notably continued population growth, population ageing and the expansion of the global middle class

• Urbanisation, a process that has been transforming the world for centuries now, continues to be important. The share of the global urban population reached above 50% for the first time in world history in the mid-2010s: cities have become the dominating force in global economics

• Environment-related megatrends, particularly with respect to climate change, and how individual, corporate and governmental levels interact

• Geopolitics, characterised mainly by a deceleration in or even reversal of global economic integration, and a shift in power from developed to developing economies

• Technological progress, which has always been the main transformative force in history and has become much more disruptive thanks to the levels achieved in connectivity and capability to store and process data.

Conclusions

What is clear to us is that not only us, but our customers are going through an accelerated transformation phase, which means that we should prepare for fundamental changes in the design and materials requirements of steel-containing products going forward. For this reason, the global steel industry should:

• Study the potential impact of megatrends on design and materials requirements of steel-users and on the competitive position of steel

• Continue to invest in the development of new products, processes and solutions that meet the key challenges steel-users are facing

• Invest in the development of necessary data and tools to promote the sustainable potential of steel products

• Focus on the use of lifecycle assessment as a strategic tool to demonstrate steel’s best in class environmental performance

• Partner up with steel consumers as a solutions provider

• Explore partnerships with competing materials supplying industries to innovate higher performance multi-material solutions that meet steel user’s changing requirements better

• Connect with new players and demonstrate the material advantages of steel in addressing their key challenges.

Climate change, and steel’s roles in both contributing to it and mitigating it in a whole host of other sectors are key strategic imperatives. The global steel industry should focus on establishing steel as the most important material decarbonisation lever for all steel-using sectors. For this purpose, we will need to combine steel’s inherent superior qualities, such as durability, flexibility, recyclability, reusability, cost and volume with a sensible decarbonisation pathway.  We should also prepare for a rapid growth in low-carbon steel demand, as steel-using sectors are expected to show rapid progress in decarbonising their operations and the use phase of their products and increasingly focus on decreasing the embedded carbon in their products from the late 2020s.

The world will be making strides towards circularity as of the late 2020s, as the data about and understanding of materials flows come together and social and regulatory pressures for circularity intensify. The global steel industry should monitor emerging circularity initiatives carefully and should also try to establish steel at the heart of emerging circular ecosystems.

The COVID-19 pandemic gave a big boost to the technological progress megatrend, and we expect the digital transformation of steel value chains to continue accelerating going forward. Therefore, steel producers will need to devise and implement the right digital transformation strategies, progressively expand smart manufacturing capabilities, carefully study digital ecosystem building opportunities and emerging issues such as data ownership, liability and benefit sharing in such more integrated approaches.

We believe that steel producers should focus on building systemic resilience to prepare for a future of more frequent and stronger disruptions brought about by growing impact from climate change and ongoing systemic shifts in global geopolitical and socioeconomic order.