Steeled for innovation
The value of steel and future trends in the UK industry - Materials Processing Institute CEO, Chris McDonald, discusses.
Steel is as essential for human civilisation as air, water, food and shelter. Its uniqueness in capability and abundance means that economic development is not possible without steel. A fundamental way to improve the quality of life for people from countries all around the world is to increase steel intensity to a point comparable with developed economies. Of course it is possible, through efficiencies and improved design, to continually reduce the amount of steel required in each application. But the underlying truth remains, that everyone, everywhere needs steel.
This creates a unique problem of competition for the steel industry. The essential nature of steel means global governments are prepared to intervene to ensure their domestic steel industry is able to provide for the needs of their economy. The traditionally high capital costs of steel production, the relatively inflexible nature of most integrated steelworks, and the continuous demand for new products and applications, result in an ultra-competitive industry. Differentiated products and added value services are supplied at close to the marginal cost of production.
In this business environment, the only way a non-state operator can thrive, or even survive, is by investing in innovation. For a material as historic and ubiquitous as steel, this innovation can be astonishingly rapid, far-reaching and advanced. Once started, further investment is required as technology transfer is swift and competitors can quickly catch up. I term this continuous, relentless innovation and it is crucial for survival in the steel industry.
These pressures of the business environment create three broad categories of drivers for innovation in the steel industry, that are with us now and
are shaping innovation programmes for the future. The categories are:
- Environmental improvement, to reduce carbon emissions and improve resource efficiency
- Competitive challenges resulting in cost and productivity improvements, and
- Market needs, driving the development of new and improved products.
Carbon emission reduction
Emissions of carbon are, unfortunately, an intrinsic part of steel production, as iron ore is reduced to iron in the blast furnace. This means the decarbonisation challenge for the steel industry is significantly greater than for other energy-intensive foundation industries, such as glass, ceramics and paper. For steel, the reduction of carbon emissions cannot be solely focused on energy efficiency, or electrification of processes. It must also include a fundamental rethink of the chemical thermodynamics of steel manufacture.
Alongside this we must consider the supreme efficiency of the blast furnace as a chemical reactor. Incremental technology improvements over many decades have resulted in modern blast furnaces, such as those found in Port Talbot, Wales, and Scunthorpe, England, operating close to the thermodynamically feasible limits for carbon emissions. Allied to this, the gases from the furnaces themselves are used to produce electricity and byproducts, such as slag, displacing other carbon-intensive materials in construction.
This means the challenge for steel producers to continually increase the global production of steel in line with population and GDP increases is severe, and yet they are responding. For instance, Tata Steel is developing an alternative to the blast furnace, known as HIsarna, which, when combined with carbon capture and storage, could reduce carbon dioxide emissions by up to 80%. Arcelor-Mittal, the world’s largest steel producer, is partnering with technology providers to demonstrate carbon capture of a different sort. By converting carbon dioxide into fuel, Swedish steel company SSAB is investigating the use of biomass in the blast furnace, and German steelmaker thyssenkrupp is collaborating with the chemicals sector to use steelworks emissions as an alternative feedstock for the polymers industry.
While all of these technologies move steel processing into a greener space, none dispense with carbon completely due to the fundamental nature of the chemical reaction required. Hydrogen has long been postulated as a potential replacement for carbon in this process, and interest in developing hydrogen alternatives is increasing. Projects include Austrian steel producer voestalpine investing in hydrogen reduction research, and a long-standing programme known as Core50 supported by the industry in Japan. In the UK, the Materials Processing Institute (MPI) is working with industrial clusters in developing and deploying the hydrogen economy more widely, but it is clear that multiple technologies will need to be deployed simultaneously in industry, heat, energy and transport, to make this an economically feasible reality.
An alternative and complementary approach to reducing carbon emissions from primary ore refining is to tackle resource efficiency in terms of recycling, reuse and reduction. Steel is already a widely recycled material and all forms of steel production include some recycled components. Unlike many materials, the recycling of steel does not necessarily result in downcycling in terms of quality and often results in quality upcycling.
There are though some quality challenges for recycled steel, which will continue to drive new innovation, both in processing and raw materials development.
The argument for reduction in steel consumption has been forcefully made by University of Cambridge Professor Julian Allwood who pointed out that, at a global level, reduction in emissions from production will still not yield the necessary elimination of carbon emissions. Achieving resource efficiency in this area will require a shift in societal expectations, as well as product design – a trend that seems to be picking up pace as the EU contemplates product standards with a requirement for repairability. What this is likely to mean for the steel industry is a shift in product qualities and a focus on value, rather than volume.
An exemplar of this is the potential for additive layer manufacturing to disrupt manufacturing supply chains, eliminating processing steps such as forming, machining and joining, with value collapsing to materials and design. This opportunity is being grasped by UK firm Liberty Powder Metals, with its recent announcement of a pilot atomisation facility for the development of new metal powders.
The intense competitive environment includes a consolidated supply base and relative consolidation of clients in key markets. This, combined with generally high capital cost fixed assets and a lack of flexibility of production for integrated sites, creates an innovation imperative to drag revenues above marginal costs.
For the future, the challenges of competition and environmental improvement indicate a need to develop new processing technologies that enable low capital cost, flexible production routes, possibly resulting in greater product specialisation. In some ways this could be viewed as an extension of the mini-mill revolution in North America in the 1980s and 1990s, which saw many traditional producers go to the wall in the face of new entrants. This trend has been given reinvigorated opportunities as new casting and rolling technologies reduce the economies of scale still further and enable both product specialisation and increased flexibility. There is increased scope for innovation here, in both the process technology and product quality development.
Sitting alongside these new process opportunities are the emerging digital and data-driven technologies of Industry 4.0. The steel industry is no stranger to these technologies, having been at the forefront of developments in big data, artificial intelligence and autonomous systems in the past. However, the combination of these technologies with advanced computing power, and their application to steel production facilities is seeing the emergence of hyper-productive steel plants, pushing forward again at the previous limitations on flexibility and economies of scale.
These innovations mean existing players in the market need to innovate quickly or suffer the same kind of disruptive destruction seen whenever transformational technology has been introduced in the steel industry in the past, such as continuous casting in the 1970s, or the Linz-Donawitz process in the 1950s. Only in January this year, the World Economic Forum (WEF) announced that Tata Steel Europe’s steelmaking plant at IJmuiden has been inducted into WEF’s prestigious community of ‘lighthouses’ – a distinction awarded to manufacturing facilities that are seen as leaders in the technologies of Industry 4.0.
Steel is constantly under pressure to evolve and adapt its properties to new and improved applications. The need for ever stronger, lighter, more formable steels for applications such as automotive, can be a process of continuous improvement, but step changes into entirely new classes of steels can also be made. The development of highly deformable twinning-induced plasticity (TWIP) steels for instance, offers the potential for a step change in lightweighting. Their drawback is the difficulty in processing, particularly casting.
Success in the development of new steel types rests on close collaboration between universities, research institutions and industry, as shown in the development of superbainite steel for defence applications.
The tragedy for the steel producer is that the competitive environment rarely allows this product development to deliver a sustained competitive advantage. An industry rule of thumb is that two-thirds of the steels we make today were not produced 15 years ago, and as such new steel types are rapidly commoditised. For a steel producer, investment in new steel development is often a hygiene factor allowing continued market access, rather than an enabler of market growth. For this reason, steel companies must not step off the treadmill of product innovation and the development of new steel types for new applications will be undiminished. This is the reality of the continuous, relentless innovation to which I referred earlier.
Where it’s possible to achieve distinctiveness, market growth can occur, such as when new steel products are allied with novel coatings technologies or added value services. Here, the UK has had great success, with colour-coated steel produced in North Wales having high weathering resistance, and the already strong Scunthorpe rails business of British Steel introducing corrosion-resistant, zinc-coated rails in 2018.
For the future, there are unexploited opportunities in the combination of material and data, using smart digital technologies to increase the functionality of the steel within its application and provide a comprehensive fingerprint for material and component processing. Innovation in this field has the potential to create both value added services and disruptive business models. This is also an area where the traditional steel industry could have much to gain from supply chain collaborations, reaching across traditional industrial boundaries to effect technology transfer.
The global steel industry has historically been highly successful in promoting international collaboration to tackle the challenges associated with the manufacture and application of steel. The essential nature of this material to all economies, whether industrialised or developing, has created an imperative for governments to come together in their collective interests to foster research and innovation in steel. Often this has been the only way to tackle the highly complex and resource-intensive requirements of development.
Foremost in these international collaborations has been the structured framework for steel research collaboration in Europe that has existed since 1952, pre-dating and fostering the European Community. It is a blow to UK steel producers that the UK seems set to withdraw from this research partnership at the point of departure from the European Union. This will be detrimental to the advancement of steel, both in the UK and more widely in Europe.
On the positive side, there have been significant investments in the UK university sector, including capital equipment and expertise at the universities of Warwick and Swansea. The government has also announced financial backing through the Industrial Strategy Challenge Funds for transformation of the foundation industries and decarbonisation of industrial clusters.
However, the challenges remain and at this time more than any other, they will require collaborative effort to be resolved. The UK steel community is committed to working internationally, with research and industrial partners, to find global solutions for these problems, just as we have in the past.
The excellent steel researchers in universities and institute’s such as my own, will continue the development of technologies that will see steel improving the quality of life of people throughout the world for centuries to come.