North Easter Asian Countries and Steel Market ;China, Japan, Korea, and Taiwan

2018.6.29

Jeong-in KIM, Hyung Wook LIM, Hyun Jung KIM
Prof. Dept of Economics. Head, Econ. of Climate Change, Graduate Students in Economics(Chung-Ang University)

Unauthorized copying is prohibited without the author’s permission

Name: KIM, Jeong In, Ph D.
Department: Professor in Economics, Chun Ang University
Contact: 010-6265-0890
E-mail: jeongin@cau.ac.kr<Education Background>
Ph. D. Applied Economics, 1987 - 1993, University of Minnesota, (U.S.A), Minneapolis/St. Paul, MN
Major in Environmental Economics, Minor in Forest Resource Economics
Emphases: Environmental and Resource Economics, Climate Change Economics, Enviornmental Policy<Research Papers>-Transboundary Pollution Issues Among the East Asian Countries (1999),-Climate Change and Business Competitiveness in Korea (2001, 2005, 2007),-Economic Effect of Emission Trading and Carbon Tax(2005),-Sustainable Banking and Finance (2006).
-Sustainable Economy and Society (2011)-Green job (2011), Green Growth 1.0 (2013), Water and Climate Change(2014)-Water and Human Right, Energy Efficiency (2015)

Presentation Outline
I. World Steel Market
II. Chinese Steel Industry
III. Korean Steel Industry
IV. Japanese Steel Industry
V. Taiwanese Steel Industry• VI. Strategies for Climate Change in Steel Industry
References

1. Developments in the World Steel Markets• Steel market sentiment has improved since 2016, potentially pushed higher by the increase ofsteel prices, modest improvements in steel demand and expectations about capacity reductions.
• However, the improvement could prove temporary given the extent of the unaddressed
underlying structural imbalances coupled with sluggish demand growth in the years to come.
Steel Purchasing Managers’ indices(PMIs)

Source: Markit Economics(2017)

4

Global Steel Industry• The industry is facing the next big change:strong players becoming stronger, emerging players, disruptors,
declining of some established players, steel production to concentrate in one region
Global Crude Steel Production and No.1 Producer’s Share

Source : worldsteel(2018)

5

Global steel industry
China plays a core role in global steel industry• Steel production and consumption in RoW grew by only 14% and 30% in the past 15 years,
while China’s jumped by 3.4 times and 2.4 times, respectively• China accounts for 86% of the world’s increase in steel production and 70% in consumption

Source : worldsteel(2018)6

World Steel production• Crude steel production increased by 4.5% in Asia during the first half of 2017 (y-o-y terms)• Steel production growing 3.7% in South Korea, and 7.7% in Chinese Taipei.
World crude steel production developments in 2016 and 2017

Source: Worldsteel(2017)7

World Steel consumption• After the decline in global steel consumption during 2015, demand for steel products around theworld has recovered in 2016 to 1515 mmt.
• Increase : China (1% growth rate), India (4.1%), the European Union (2.2%), ASEAN economies (11.4%).
• Decrease : Latin America (13.6%), CIS (4.1%), NAFTA (1.6%), Middle East (1.3%), Africa (2.1%).
Apparent steel use(finished steel products)

Source: Worldsteel(2017)8

World Steel prices••

The modest uptake in steel demand during 2016 has seen prices respond rapidly, even in a context of ample supply.
The world steel price index, which had been trending downwards since the second quarter of 2011,reached a floor during December 2015, and seems to be climbing back, standing now around its 2014 levels.
World steel prices(latest month July 2017)

Source: Platts Steel Business Brefing

9World raw material prices• Prices of key steelmaking raw materials have declined over the past several years, helping to bring steel
production costs down significantly. (Selected prices for iron ore, coking coal and scrap)• Those prices reached record lows in the beginning of 2016, and have since recovered some ground, albeit inwhat seems a rather volatile and unpredictable manner.

Key raw material price indicators

Source: Platts Steel Business Brefing

10Global steel trade
China is a key player in global steel trade• Steel exports from RoW grew by only 17% or 53.8 Mt in the past 15 years, while
China’s jumped by 15.3 times of 101 Mt• China contributed 65% of the increase in the world’s steel exports

Source : worldsteel(2018)11

Global steel trade
China is the only driver in global iron ore market• Global iron ore trade increased by 1020 Mt in the past 15 years, of which 94% or 950 Mt from China,
while RoW’s iron ore imports grew by only 15% or 65 Mt• More than 95% of China’s new steel capacities are BF-BOF route

Source : worldsteel(2018)

12

The steel market outlook• World steel demand recorded a high growth rate of 4.7% in 2017, but it is expected that the growth rate will

decline by 1.8% and 0.7% respectively in 2018 ~ 2019.

Global GDP and steel consumption growth rate and prospect(1980~2019)

Global GDP Growth rate(←)

Global steel consumption(→)

Source: IMF(2017), Worldsteel(2017)13

2018~2019 Global steel demand prospect
2016

2017

(million tonnes, %)

2018f

2019f

North America

132.3(∆1.5)

140.7

(6.4)

145.0

(3.)

147.3

(1.6)

US

91.9

(∆4.4)

97.7

(6.4)

100.3

(2.7)

102.3

(2.0)

Latin America

39.4(∆13.4)

40.9

(3.8)

43.5

(6.2)

45.6

(4.9)

Brazil18.2(∆14.4)

19.2

(5.3)

20.4

(6.3)

21.6

(6.2)

EU28

158.4

(2.9)

162.3

(2.5)

165.6

(2.0)

166.9

(0.8)

other Europe

40.6

(1.7)

42.3

(4.1)

44.2

(4.5)

46.1

(4.4)

CIS

49.7

(∆2.2)

52.8

(6.1)

54.0

(2.3)

55.0

(1.8)

38.6

(∆3.0)

40.6

(5.1)

41.5

(2.1)

42.1

(1.4)

Middle east

53.1(∆1.4)

53.3

(0.4)

55.7

(4.6)

57.8

(3.7)

Africa37.6(∆2.8)

35.1(∆6.8)

36.6

(4.5)

38.3

(4.6)

Asia

998.0

(2.2)

1,053.6(5.6)

1,065.1(1.1)

1,063.1(∆0.2)

China

680.3

(1.2)

736.8

(8.3)

736.8

(0.0)

722.1

(∆2.0)

India

83.6

(4.3)

87.2

(4.3)

92.0

(5.5)

97.5

(6.0)

Japan

62.2

(∆1.2)

64.4

(3.7)

64.5

(0.1)

64.9

(0.6)

Korea

57.1

(2.3)

56.4

(∆1.2)

57.0

(1.0)

57.5

(1.0)

ASEANS

74.1(13.9)

70.3(∆5.2)

74.9

(6.6)

79.8

(6.4)

Oceania

6.8(∆6.3)

6.4(∆5.8)

6.4(∆0.8)

6.6

(4.4)

World

1,516.0(1.0)

1,587.4(4.7)

1,616.1(1.8)

1,626.7

(0.7)

835.7

(0.9)

850.6

(1.8)

879.3

(3.4)

904.6

(2.9)

Russiaexcept China

Source : worldsteel(2018)14

Environmental performancein Steel Industry
Dramatic improvement in environmental performance• Energy intensity of mid-large steel mills declined by 27% in the past 15 years,
while fresh water intensity dropped by 80%• Not much potential for radical improvement, as it’s approaching technical limits of theexisting technologies
Energy Efficiency Improvement

Water Efficiency Improvement

Source: CISA(2017)15

II. Chinese Steel Industry
China's steel demand is expected to decline• Steel demand was specially driven by the government's stimulus package in 2017
• But expected to stagnate due to the economic stimulus, slowdown in the demand industry, 2018.
The Trend of Growth in the Steel Demand Industry(y-o-y, %)
2014

2015

2016

2017

2018.1~2

∆10.7

∆14.0

8.1

7.0

2.9

automobile

7.1

2.7

13.1

3.2

∆5.0

car

3.9

∆8.3

3.7

∆0.8

∆5.8

∆1.0

∆1.9

4.6

13.6

4.5

∆3.3

0.7

4.9

3.2

∆1.1

air-conditioning

11.5

0.0

4.5

26.4

17.0

a private vessel

5.5

∆0.3

∆11.9

9.5

∆10.2

real estate
new construction area

The proportion of steel consumption by industry(%)
constructio

applianc

n

es

55.0

1.5

Source: Worldsteel

electricalequipment

3.7

machinery18.8

metallic

8.2

automobiltranspor

e

t

8.1

4.7

sum

100

householdrefrigerators

householdwashing machines

Source: Chinese national statistics bureau

16

•
•

From a mid-term perspective, there are many factors that may cause a decline in steel demand, such as a decrease inproducible population, a decline in investment growth, a decline in steel concentration, and a decline in consumption of
artificial steel
The producible population is closely related to economic growth rate and steel consumption. In China, the producible
population has been declining since 2015, and the proportion of the producible population has continued to decline since2011.

Economic Growth andthe Growth of the producible Population
Growth of the producible
Population

Source: IMF, UN

Economic
GrowthSteel consumption andproducible population proportion(thousand)(Million ton)

crude steel
consumption

Producible population
proportion

Source: Worldsteel, UN

17

•As the Chinese government is pushing for a growth method from investment to consumption, the investment growth rateis continuously declining, which is a factor leading to a decline in steel consumption.

Real Investment and SteelConsumption Growth

Iron Intensity andInstant Steel Consumption per capita(Ton/million USD)

real investment growth rate

steel consumption growth rate

Instant Steel Consumption
per capita(→)

Source: IHS•

Source: HIS, worldsteel

However, urbanization rate is rising continuously and that the Chinese government will not tolerate the plungein the construction industry.
18

Steel Production•

Crude steel production in China mainland was 804 million ton in 2015, 19.18 million ton lower than the year before,
down 2.33%.

Crude Steel Production and Growth in China Mainland

Source: China Steel Industry Development 2016

19

•
•

The total production of crude steel in the world's 66 major steel-producing countries and regions was 1.6 billion ton in2015, down 2.86% over the previous year.
Crude steel production decreased in most of the major steel-producing countries and regions, and increased in very
few countries.
Crude Steel Production in Major Steel-producing Countries and Regions

Source: China Steel Industry Development 201620

Steel Demand and Reduction of Excess Capacity• Apparent crude steel consumption in China was 700 million ton in 2015, accounting for 42.9% of the world
total, and China remains the world's largest steel market.
• Steel excess capacity is a global issue. According to data from World Steel Association, the utilization rateof global crude steel capacity was 69.7% in 2015.
• China’s crude steel production capacity in 2014 was around 1.13 billion ton, and the capacity utilization
rate was 71.2% per steel production in 2015, comparable to the global level.
• In February 2016, “Guidance for the Steel Industry to Reduce Excess Capacity and Resolve Difficulties for
Further Development”, planning to reduce another 100 to 150 million ton steel production capacity in thenext five years
Crude Steel Consumption

Source: China Steel Industry Development 201621

Steel Import and Export
Steel export reached 112 million ton in 2015, up 19.9% over the previous year
steel import stayed at 12.78 million ton, down 11.4% over the previous year
net steel export was equivalent to 103 million ton of crude steel
Imported 953 million ton of iron ore in 2015, up 2.2% over the previous year.
Import Australia(607 million ton), up 10.76%, Brazil(192 million ton)- up 12.1%, South Africa(45.3783 million
ton, up 4.06%.
• Iron ore import from Australia and Brazil accounted for 83.85% of the total import in 2015.
•
•
•
•
•

Import and Export of Steel Products
Sources of Iron Ore Imports

Source: China Steel Industry Development 2016
Source: China Steel Industry Development 201622

Energy Conservation and Environmental Protection• In accordance with the requirement of green development, China’s steel industry has increased inputs incapital, talent, technological research and development, and carried out valuable explorations in the newgeneration of recyclable processes for steel production, green manufacturing, and environmental
management, etc.
• A number of advanced enterprises in energy conservation and environmental protection have emergedwith Baosteel, TISCO and Hesteel Tangsteel becoming excellent showcases for green development.
• The implementation of the new Environmental Protection Law in 2015 has put forward higher
requirements and more stringent standards on the steel industry.
• For major member enterprises of China Iron and Steel Association, the average energy consumption per
ton of steel decreased from 605 kg of standard coal to 572 kg from 2010 to 2015, exceeding the targetof 580 kg in energy conservation ahead of schedule• new water consumption decreased from 4.1 cubic meters to 3.25 cubic meters, attaining the water-saving
target of 4 cubic meters ahead of schedule• sulfur dioxide emissions decreased from 1.63 kg to 0.86 kg, surpassing the target of 1.0 kg; and COD per
ton of steel decreased from 70g to 22g, realizing the target ahead of schedule.
23III. Korean Steel Market and General Economy
•
•
•

•
•

GDP : In 2017 Recorded growth rate of 3.1% due to upturn in equipment investment and exports led by global
economic recovery.
Private Consumption : In 2017 Marked 2.5% growth rate owing to increase of wage income and consumer
confidence.
Equipment Investment : In 2017 Investment in IT sector such as semi-conductor and display panel led the strong
growth of 14.3%.
Construction Investment : In 2017 Despite government’s SOC budget reduction(-6.6%), construction investment
marked 7.2% growth due to active residential construction and private plant construction.
Exports : In 2017 Increased by 3.6% due to global economic recovery and increased demand of semiconductors andetc.

Economic Indicators in Korea

Source: Bank of Korea(2018)
Source: Bank of Korea(2018)24

Steel-using Industries in 2017•

Construction : Construction Investment increased by 7.2% in 2017•

Machinery : marchinary production increased by 6.5% in 2017

• Automobile: Auto production decreased by 2.7% in 2017
• Shipbuilding : ship delivery decreased by 13.8% in 2017

Construction

Source: Construction Association of Korea

Shipbuilding

Source: Clarkson

Automobile

Source: Korea Automobile Association

Machinery

Source: Korea Association of Machinery Industry

25

Steel-using Industries outlook 2018•

Construction : Investment is expected to grow only 0.6% due to slowing growth centered on private housing•

Automobile : Production is expected to remain low at around 4.1 million units due to sluggish domestic demand,
exports and plant shutdowns•

Shipbuilding : Orders are expected to recover moderately from the order cliff, while drying volume is decline sharply•

Machinery : household appliances production expected to remain sluggish due to localization and export difficulties indemand for environmental appliances.
Domestic demand industry outlook
2016

2017

2018

annual ½ half 2/2 half annual

2019½ halfQ1

Q2

2/2 half annual
Q3Q4½ half
Q1

Q2

Automobile(thousands)

4,229

2,163

1,952

4,115

963

1,089

2,052

1,000

1,005

2,005

4,057

983

1,125

2,108

(-7.2)(-1.5)(-4.0)(-2.7)(-7.5)(-2.9)(-5.1)(-0.2)

(5.8)

(2.7)

(-1.4)

(2.1)

(3.3)

(2.7)

Shipbuilding(million GT)

25.4

12.7

9.9

22.6

5.2

3.5

8.7

3.2

3.0

6.2

14.9

3.2

3.5

6.7

(7.2)

(-11.4)(-10.8)(-11.2)(-26.1)(-38.0)(-31.4)(-55.0)(7.4)(-37.4)(-34.0)(-38.7)(0.0)(-23.2)

Construction(trillion won)

233.4

116.5

134.5

251.1

50.2

67.6

117.9

67.1

67.6

134.7

252.5

50.0

67.5

117.5

(10.3)

(9.7)

(5.8)

(7.6)

(1.5)

(0.8)

(1.1)

(0.2)

(0.0)

(0.1)

(0.6)

(-0.4)(-0.2)(-0.3)

Machinery(2010=100)

51.9

48.3

47.4

47.9

42.1

58.9

50.5

54.6

42.1

48.4

49.4

45.0

56.3

50.7

(9.3)

(-7.9)(-7.8)(-7.8)(-7.3)(15.1)

(4.5)

(6.5)

(-3.4)

(1.9)

(3.3)

(6.9)

(-4.4)(0.3)

Note : 1Q 2018 is estimate, after 2018 1Q the POSRI forecast, () is the rate of increase and decrease in the same period of last year

Korean Steel Market

Consumption(Million MT)

Steel Consumption : Showed modest growth in past
3 years but decreased by 1.2% due to slump in the
shipbuilding industry.

Source: Korea Iron & Steel Association

Production(Million MT)

Steel Production : Steel production has beenstabilized at about 74 million tons in previous
three years but increased by 3.8% in 2017.

Source: Korea Iron & Steel Association

27

Steel Exports
2016 : Decreased by 1.8% due to slowdown of global steel demand and strong tradeprotectionism.
2017 : Despite decrease of exports to major markets, exports showed a similar trend to therecent years due to increase in input exports to the foreign investments by Korean steelmakers.
- Exports to China(-7.7%) and U.S.(-5.3%) decreased while exports to emerging markets like
India(13.1%↑), Mexico(18.5%↑), MEA(13.5% ↑) increased.
- Korea has geographically balanced and diversified portfolio for steel exports.
(Million MT)

Source: Korea Iron & Steel Association

Korea’s Steel Exports by Country in 2017

Source: Korea Iron & Steel Association

28

Steel Imports
2016 : Surged by 7.5% due to maintenance work caused by unexpected troubles of blast furnace.
2017 : Decreased by 16.8% due to slump in shipbuilding industry and domestic effort to reduce imports.
- Import of plates plunged by 54.1%.
- China and Japan, which account for 88% of the total imports, decreased by 21.1% and 15.0% respectively,
compared to previous year.

(Million MT)

Source: Korea Iron & Steel Association

Korea’s Steel Exports by Country in 2017

Source: Korea Iron & Steel Association

29

Steel supply and demand•

Domestic demand : The construction industry is expected to shrink by 1.5% in 2018 due to sluggish automobiles•

Export : The decline in steel pipe exports due to US import regulations will decline in 2018, but the decline is expected to be minimal•

Production : The increase in plate production is expected to only increase by 0.6% in 2018 due to sluggish domestic demand•

Import : Domestic imports continued to decline in 2018 due to sluggish domestic demand and expansion of plate materials supply,
the lowest level is expected since 2004

Steel supply and demand outlook
2017

2016
annualdomestic
demandexportproduction

importsemiproductinclusion½ half(thousand tons, %)2018

2/2 half annual

2019½ halfQ1

Q2

2/2 half annual

Q3Q4½ half

Q1

Q2

57,076

28,626

27,77656,402

13,145

14,37027,515

14,17013,85528,02555,54013,90014,55528,455

(2.3)

(1.2)

(-3.5)(-1.2)(-8.3)(0.5)(-3.9)

(1.1)

(0.7)

(0.9)

(-1.5)

(5.7)

(1.3)

(3.4)

30,97015,976

15,693

31,668

7,868

7,840

15,708

8,105

7,745

15,85031,558

7,845

7,925

15,770(-1.8)(6.2)(-1.5)(2.3)(-2.2)(-1.1)(-1.7)(-1.6)

(3.8)

(1.0)

(-0.3)(-0.3)

(1.1)

(0.4)

74,30738,49838,663

77,161

18,797

19,65038,447

19,83019,34539,17577,622

19,25019,77539,025

(0.3)

(6.0)

(1.8)

(3.8)

(-1.8)(1.6)(-0.1)

(0.5)

(2.2)

(1.3)

(0.6)

(2.4)

(0.6)

(1.5)

13,739

6,104

4,805

10,909

2,217

2,560

4,777

2,445

2,255

4,700

9,477

2,495

2,705

5,200

(3.8)

(-13.0)(-28.5)(-20.6)(-31.3)(-10.9)(-21.7)(-3.1)(-1.1)(-2.2)(-13.1)(12.5)

(5.7)

(8.8)

23,717

11,3208,418

19,738

4,054

4,955

9,009

4,335

3,850

8,185

17,194

4,305

4,920

9,225

(7.5)

(-4.4)(-29.1)(-16.8)(-29.7)(-10.8)(-20.4)(-5.3)(0.3)(-2.8)(-12.9)(6.2)(-0.7)(2.4)

Note : 1Q 2018 is estimate, after 2018 1Q the POSRI forecast, () is the rate of increase and decrease in the same period of last yearIV. Japnese Steel Industry

Manufacturing market sentiment• Japan’s manufacturing market sentiment has been stronger in line with the global upward trend

Source: Markit Economics

31

Steel demand•

Japan’s apparent crude steel consumption has been recovering, supported by robust domestic demand

Source:JISF

Source: JISF

32

Role of steel-using sectors•

Construction and some manufacturing sectors have been the major drivers of Japan’s steel demand

Notes: Data are on an ordinary steel basis. Machinery (a) denotes industrial machinery.
Machinery (b) denotes electrical machinery.
Source: JISF

33

Steel supply• Japan’s crude steel output has been recovering gradually• Japan’s steel imports have grown faster than its steel export

Source: JISF

Source:JISF

34

Outlook• Projects associated with the Tokyo 2020 Olympic and Paralympic Games should have a positiveeffect on Japan’s steel demand

Source: JISF

35

V. Taiwanes Steel Industry
Steel Trade Balance• Rising exports and falling imports caused Taiwan’s steel trade deficit to become a steel trade surplus between 2006
and 2007.
• In 2017, Taiwan’s steel trade surplus amounted to 4.6 million metric tons, up from 4.3 million metric tons in 2016.

Taiwan’s Trade in Steel Mill Products

Source: HIS Markit Global Trade Atlas

36

Imports• Taiwan is the world’s nineteen-largest steel importer. In 2017, Taiwan imported 7.4 million metrictons of steel, a 6 percent decrease from 7.8 million metric tons in 2016.
• The four countries highlighted in the map below represent the top import sources for Taiwan’s
imports of steel, with each sending more than 500 thousand metric tons to Taiwan and together
accounting for 83 percent of Taiwan’s steel imports in 2017.
Taiwan’s Imports of Steel Mill Products 2017

Source: Global Trade Atlas(2018)37

Import Volume, Value, and Product• Taiwan has averaged 7.9 million metric tons of annual steel imports in recent years.
• In 2016, the volume of Taiwan’s steel imports increased by 5 percent to 7.8 million metric tons
from 7.5 million metric tons in 2015 before decreasing by 6 percent to 7.4 million metric tons between
2016 and 2017.
Taiwan’s Imports of Steel Mill Products
Millions of Metric Tons

Source: HIS Markit Global Trade Atlas

Taiwan’s Imports of Steel Mill Products
Billions of USD

Source: HIS Markit Global Trade Atlas

38

Top Sources by Steel Product Category• The top source countries for Taiwan’s imports by volume vary across types of steel products, though Japan and China

held the top two spots for nearly every product category.

••Taiwan imported the largest share of flat products from Japan in 2017 at 46 percent (727 thousand metric tons), followedby China at 21 percent (340 thousand metric tons).
Japan also accounted for the largest shares of Taiwan’s imports of long products at 26 percent (286 thousand metric tons)
and semi-finished steel at 47 percent (789 thousand metric tons).
Taiwan’s Top 5 Import Sources by Product 2017

Source: HIS Markit Global Trade Atlas

Millions of Metric Tons

39

Taiwan’s Import Market Share in Top Destinations• In 2017, the import market share for Taiwan’s steel products increased in five of Taiwan’s top export destinations forwhich data are available.
• The share of steel imports from Taiwan increased the most in Belgium and South Korea, each up 1.6 percentage
points from 2016.

Taiwan’s Steel Import Market ShareTop 10 Export
Destinations

Share of
Imports from
Taiwan 2016

Taiwan’s Rank
in 2016

Share of
Imports from
Taiwan 2017

Taiwan’s Rank
in 2017

Vietnam

0.0%

N/A

N/A

N/A

China

11.7%

3

11.1%

3

United States

3.3%

9

3.3%

9

Japan

17.3%

3

16.9%

2

Malaysia

10.8%

4

12.1%

3

South Korea

2.0%

4

3.6%

3

Thailand

5.4%

4

4.1%

5

Belgium

0.9%

15

2.5%

9

Australlia

6.2%

4

7.2%

3

Indonesia

2.7%

7

3.5%

7

Source: IHS Global Trade Atlas

40

Overall Production and Import Penetration• Taiwan’s crude steel production decreased 7 percent in 2015 to 21.4 million metric, production has since increased 5 percent
to reach 22.4 million metric tons in 2017.
• In 2017, the gap between production and demand stood at 4.6 million metric tons.

41

Exports•••

Taiwan is the world’s thirteenth-largest steel exporter. In 2017, Taiwan exported 12.0 million metric tons of steel, a one
percent decrease from 12.2 million metric tons in 2016.
Taiwan’s exports represented about 3 percent of all steel exported globally in 2016.
The five countries highlighted in the map below represent the top markets for Taiwan’s exports of steel, receiving
more than 900 thousand metric tons each and accounting for 51 percent of Taiwan’s steel exports in 2017.

42

Export Volume, Value, and Product• In 2017, Taiwan’s steel exports decreased by 1 percent to 12.0 million metric tons. The value of Taiwan’s 2017 steel exports
increased by 27 percent to $10.2 billion from $8.0 billion in 2016, which can be attributed to an increase in global steel
prices.

43

Top Markets by Steel Product Category• Taiwan’s top export markets by volume vary across types of steel products. Vietnam accounted for the largest share of
Taiwan’s exports of flat products in 2017 at 16 percent (1.4 million metric tons), followed by China at 14 percent (1.2
million metric tons).
• South Korea was the largest market for semi-finished exports at 37 percent (104 thousand metric tons), while Italy
accounted the largest share of stainless exports at 10 percent (143 thousand metric tons).

44

Taiwan’s Export Market Share from Top Source Countries• In 2017, the share of steel exports sent to Taiwan from its top import sources increased half of the top sources forwhich data are available.
• The share of Japan’s steel exports to Taiwan showed the largest increase — up 1.5 percentage points from 2016,
followed by Russia (up 1 percentage point).
Taiwan’s Steel Export Market ShareTop 10 Import

Share of Exports

Taiwan’s Rank

Share of Exports

Taiwan’s Rank in

Sourcesto Taiwan 2016

in 2016

to Taiwan 2017

2017

Japan

6.1%

5

7.5%

4

China

2.3%

11

2.1%

11

Russia

10.4%

2

11.5%

2

South Korea

2.3%

12

1.8%

13

United Arab Emirtes

N/A

0

N/A

N/A

Iran

10.3%

4

7.4%

5

India

0.5%

33

0.9%

26

Vietnam

N/A

0

N/A

N/A

Thailand

6.5%

5

5.0%

8

United Kingdom

0.6%

21

1.0%

16

Source: IHS Global Trade Atlas

45

Overall Production and Export Share of Production•••

Taiwan’s crude steel production increased 3 percent to 22.4 million metric tons from 2016 to 2017.
In 2017, the gap between production and demand widened to a peak of 4.6 million metric tons.
Taiwan’s steel exports as a share of production fell by nearly 12 percentage points as production increased while
exports held steady. Since then, the export share has remained above 50 percent and reached 53.6 percent in 2017.

46

VI. Strategies for Climate Change in Steel Industry•

The reduction of CO2 from steel production is an established priority, as is the reduction of GHG emissions during
the life cycle of products that use steel.

Possible directions for climate change mitigation
1. Carbon• Used as a reducing agent• But the CO2 produced will need to be captured
and stored.
→ including maximum use of scrap, bestpractice operations and CO2 capture for storage.
• The ironmaking solutions include the blast
furnace with integrated CCS as in the HIsarna
program, a re-designed smelting reduction
process→ reduction of 20% of CO2 per ton of steel
produced

2. Hydrogen• Used as a reducing agent replacing carbon(thereaction produces only water vapor)• Hydrogen, either pure or as a synthesis gas(syngas), can be used in conventional directreduction reactors or in more futuristic flash
reactors.
※ The hydrogen will need to be produced using
carbon-free energy→ the energy requirement would be higher
than using it directly in the steelmaking process

Source: World Steel Association, Fact Sheet – Climate change mitigation by technology, innovation and best practice transfer (2018.02)

47

Strategies for Climate Change in Steel Industry•

The reduction of CO2 from steel production is an established priority, as is the reduction of GHG emissions during
the life cycle of products that use steel.

Possible directions for climate change mitigation
3. Biomass• Biomass – can be used to generate thereducing agent (carbon), either from charcoal,for example, or syngas• Biomass can be added as charcoal in blast
furnaces, to the coke oven charge, burned asfuel in steelmaking reactors or used in direct
reduction as syngas etc.
※ A balance needs to be considered in theamount of land area used to grow the biomass
and the volume of steel required in the region

4. CCS• Storage - in deep saline aquifers, depleted oilor gas fields, compensate for existing gasfield
extraction or enhanced oil/gas recovery andused in coal mines as geological storage, orturned back into carbonates (mineralogicalstorage)• Developed such as gaseous cement used asreef replacement or building water barrier(ex) Emirates steel – capture and use the CO2 forenhanced oil recovery(EOR)→ store 800,000 tCO2 annuallySource: World Steel Association, Fact Sheet – Climate change mitigation by technology, innovation and best practice transfer (2018.02)

48

Strategies for Climate Change in Steel Industry
Steel in the circular economy•

Continuing to fulfill a positive role in sustainable future comes with some major challenges
1. Recycling• The use of steel scrap – reduces carbon emissions from the steel life cycle※ Limited by the availability of scrap due to the long life of steel products

2. Use of by-product• Byproducts – reduces CO2 emissions by substituting resources in other industries(ex) blast furnace slag – the cement industry , steelmaking slags – civil works aggregates

3. Energy efficiency• Reduced energy consumption per ton of steel produced by 60%(for 50 years)• But there is limited room for further improvement on the basis of existing technology

4. Use of finished steel• Avoid CO2 emissions from the use of high grade applications(ex) high strength steels – reduce the weight → carry more steel for the same amount of CO2

5. Life cycle approach• Considers the emissions associated with the manufacture of steel products+ the reduction in energy consumption from the use of lighter and stronger steels
Source: World Steel Association, Steel’s contribution to a low carbon future and climate resilient societies – worldsteel position paper (2017)49

Strategies for Climate Change in Steel Industry
Global steel industry activities – dedicated initiatives
1. Breakthroughtechnology development• The development andintroduction of radical newsteelmaking technologies
with a lower carbon
footprint including reuse ofCO2(ex) Hisarna(Europe),
COURSE50(Japan),State of the Art Clean
Technologies(SOACT, Pacific rim),
POSCO(Korea&China),
Steel Corporation(Taiwan)

2. LCI database• Establish the database of life
cycle inventory data of awide range of steel products

4. Market development
programs• Development programs for
improving the energy
efficiency in steel-using
sectors

Source: World Steel Association, Fact Sheet – Climate change mitigation by technology, innovation and best practice transfer (2018.02)

3. Technology sharing• Sharing the technical reports
in cooperation with steel
companies of WSA→ Improve theenvironmental performance
5. Climate action
recognition program• Development and agreementof a common calculation
methodology for the CO2
footprint of steel plants50Thank you
jeongin@cau.ac.kr

Source : United Nations ESCAP Report51