They observed that the price of coking coal went from USD 75 per ton in February 2016 to USD 200 in December 2017, but it wasn’t a linear rise. In April 2016, the Chinese government implemented policies limiting the mining and production of coking coal, sending prices up to USD 300 per ton in just 2 months. Prices did eventually stabilize, but a series of natural disasters compromised supplies and logistics from major suppliers, leading to another rapid price increase.

The Chinese government is tackling overproduction and pollution in a series of economic policies. (Source: Brian D. Colwell)

Iron ore prices also had their ups and downs. At the beginning of 2016, the price for iron ore was  USD 41 per ton. Then, it reached USD 95 at the beginning of 2017, went back down to USD 57 in June, then shot back up to USD 70 in December 2017.

This price instability placed a heavy burden on steel producers and steel-consuming industries, making it hard to plan for the near and distant future. The following are a few of the factors that contributed to the capricious prices that will likely continue on into 2018 and beyond.

SEE ALSO: How Factories Produce Steel- the Smart Way

China environmental policy

Beginning in 2016, the Chinese government sought to close over 1,000 coal mines in just one year to cut the country’s production capacity by 60 million tonnes. This is part of the 5-year goal of cutting 500 million tonnes of surplus capacity.

Policies included switching to cleaner fuels and reducing mining-related working days from 330 to 276 days per year. Numerous small and medium-sized mines closed down as a result of the financial burden and domestic coal production was down 7.8 percent YoY.

Chinese mine workers were limited to 276 days of work per year in 2016.(Source: Mashable)

As China is the biggest producer of coal and the third largest producer of iron ore in the world, global prices skyrocketed and the ripple effect was felt in markets all over the world. Due to the greater-than-expected domestic and global outcomes, the Chinese government eased some of its policies in November of 2016, bringing prices back down by about 50 percent. However, the government is scheduled to gradually enforce production capacity reduction and environmental policies again in the near future. In the meantime, prices will continue to fluctuate in accordance to policy changes.

Climate change and unstable supplies

Australia is one of the top producers of coking coal and iron ore in the world, and the biggest net exporter. Much of the world relies on the raw materials coming from Australian mines, but in 2016 and 2017, natural disasters shut down mines and paralyzed logistics routes in the country.

In September 2016, Australia experienced record-breaking heavy rainfalls that led to the collapse of the Anglo American and South32 mines, and derailed railways leading to Port Abbot Point. Heavy rainfall again shut down rail operations and other major logistics routes in the beginning of 2017.

El Niño and La Niña events around the world are causing sporadic weather patterns that are costly to the environment and economy. (Source: Time)

Such inclement weather can be attributed to increasingly frequent El Niño and La Niña events around the world. According to the U.S. National Ocean Service, “El Niño and La Niña are opposite phases of what is known as the El Niño-Southern Oscillation (ENSO) cycle,….the fluctuations in temperature between the ocean and atmosphere in the east-central Equatorial Pacific… La Niña is the cold phase of ENSO and El Niño as the warm phase of ENSO.” Such deviations from average temperatures can cause fluctuations in global weather and climate, posing high risks for coal supplies and logistics.

The Oligopoly of major suppliers

Already, the biggest coal and iron ore producing companies are concentrated in Australia and Brazil. The “big four” are considered to be Vale, Rio Tinto, BHP Billiton and FMG, whose combined exports amounted to 959 million tons in 2014, 1.068 billion tons in 2016 and is expected to reach 1.135 billion tons in 2018.

Their growing share of the global minerals export market as oligopolies over the last few years have only strengthened their power to negotiate prices and contributed to the abnormal amplification of iron ore and coking coal prices. Plus, their position only looks to be solidified with the rise of renewable energy and environmental policies that are forcing smaller mines to close down.

Four major mining companies are expanding their share of the global market. (Source: New York Times)

BHP Billiton is the biggest exporter of coking coal in the world, and it announced in 2016 that it would increase coal output by 8 percent over the next 3 years. The company already owns several major coking coal mines all over the world, but continues to acquire profitable mines with high-quality minerals. Other major mining companies are also expected to continue increasing their share of the market, shutting out smaller companies and increasing prices for coking coal and iron ore.

In the near future, coking coal and iron ore prices will continue to be volatile, forcing steel and related industries to adopt more efficient and sustainable production processes to compensate. As such, global steel companies like POSCO are investing in sustainable energy alternatives to power production, smart factories to enhance efficiency as well as researching high-quality steel materials to boost its competitiveness in the global market. Preemptive planning in an unpredictable market has led to POSCO’s growth and success over the last 50 years, and it will continue to be a global steel leader and solution provider for its partners.

Cover photo courtesy of AVMY Steel Science.

With the performance increase in both steel and non-steel businesses in Korea and overseas, operating profit was highest it’s been in the last 6 years, and the operating profit to sales ratio was 7.6 percent. Year-on-year consolidated sales increased by 14.3 percent and operating profit and net profit increased by 62.5 percent and 183.7 percent respectively.

The total operating profit of POSCO’s non-steel businesses, which reached KRW 10 billion last year, also turned into a surplus. There was an overall increase in non-steel businesses including trade, energy, ICT, chemicals and materials, resulting in KRW 1.0927 trillion of profits, up KRW 1.0798 trillion from last year.

This is in line with POSCO CEO Ohjoon Kwon’s strategy to focus on group management by securing future growth engines and reforming non-steel businesses.

※ Total operating profit per sector

Indonesia-based integrated steel mill, PT. KRAKATAU POSCO, also generated a surplus for the first time since operations began in 2014. Mexico-based automotive steel sheet plant, POSCO Mexico, as well as India-based cold rolled steel corporation, POSCO Maharashtra, also achieved their highest operating profit, tripling the total operating profit of overseas steel business.

Moreover, separate sales and operating profit increased year-on-year by 17.4 percent and 10.1 percent respectively to KRW 28.5538 trillion and KRW 2.9025 trillion, and the net profit was KRW 2.5457 trillion.

Production and sales decreased year-on-year due to the repair and facility rationalization of Pohang Blast Furnace No. 3, but the sales ratio of World Premium products with better technology and higher returns increased to 53.4 percent, its higher ever.

Financial soundness was also saw improvements. POSCO’s Consolidated debt ratio decreased by 7.5%p year-on-year to 66.5 percent, the lowest since 2010. Separate debt ratio also decreased by 0.5%p year-on-year to 16.9 percent, constantly renewing the lowest record on a yearly basis.

POSCO also demonstrated a cumulative financial improvement of KRW 7 trillion with 150 cases of restructuring in the last 4 years, reinforcing the business structure as well as financial competency. Accordingly, this year the company expects to make more investments in new growth engines such as lithium and cathode materials as well as energy and construction in addition to renewing the facilities at its steel mills. Thus, there will be a budget of KRW 4.2 trillion for consolidated investment, an increase of KRW 1.6 trillion compared to last year. The consolidated sales target is KRW 61.9 trillion.

※ POSCO’s 2017 business performance

1. #Winning – competitiveness and sustainability

POSCO was recently named the world’s most competitive steelmaker for the eighth consecutive year by World Steel Dynamics (WSD). POSCO again took home the gold with the highest scores in five categories including innovative technology, cost reduction, skill level of labor, restructuring and investment environment.

POSCO is the world’s most competitive steelmaker.

Not only did POSCO come out on top for competitiveness, the company was ranked 35th among the “Global 100 Most Sustainable Corporations in the World in 2017,” by Toronto-based magazine and research firm Corporate Knights. The list was announced in early 2017 at the World Economic Forum in Davos, Switzerland. This is the third consecutive year POSCO made the list with outstanding scores in safety, environment and the salary levels of employees.

2. Joining the trillion club

POSCO entered the trillion club twice in 2017 as it recorded USD 1.283 billion (KRW 1.365 trillion) of operating profits in the first quarter, and USD 1.0581 billion (KRW 1.1257 trillion) in the third quarter based on its consolidated operating profit. Even in the midst of global oversupply and governments opting for protectionist policies, POSCO’s profits were unscathed. Much of the credit is owed to the company’s steel and non-steel affiliates overseas with strong sales performances. The consolidated debt-to-equity ratio was the lowest since 2010 and the non-consolidated debt-to-equity ratio was at its lowest ever.

POSCO recorded an operating profit over KRW 1 trillion in the first and third quarter of 2017.

To add, international credit rating agency S&P upgraded POSCO’s BBB-plus credit rating outlook to “stable” last February, and Moody’s also upgraded POSCO’s long-term corporate credit rating outlook to “positive” on October 26.

3. Everything’s bigger in…POSCO

Last June, after 102 days of repair, Pohang Blast Furnace No.3 became the world’s fifth-largest blast furnace. Its internal volume expanded from 4350㎥ to 5600㎥, allowing the super-sized blast furnace to put out 15,000 tons of molten metal daily. POSCO currently operates five super-sized blast furnaces, or blast furnaces sized 5500㎥ or larger.

Pohang Blast Furnace No. 3 under construction.

POSCO further upgraded Pohang Blast Furnace No.3 by adding in AI capabilities. It is now equipped with smart technology that can control the internal state of the blast furnace automatically, and smart sensors can now predict accidents before they happen, extending the lifespan of the furnace. Furthermore, POSCO plans to collect big data from the blast furnace and use it to develop fully smart blast furnaces in the future.

4. The smarter the better

Since his taking up the CEO position in 2014, POSCO CEO Ohjoon Kwon has repeatedly expressed his vision for securing future competitiveness through smart solutions. The company even started a smartization training course for employees and held the Smart POSCO Forum 2017 last July to share its insights and progress with clients and affiliates.

POSCO is gaining a competitive edge through smart solutions. (Source: Global Trade Magazine)

Moreover, POSCO also supported a smart talent training project customized for SMEs. The program included job training for AI and big data application technologies. Going forward, POSCO plans to build a “Smart Industry” to increase steel competitiveness and create new business opportunities with new, smart technologies.

SEE ALSO: How Factories Produce Steel- the Smart Way

5. Getting in on electric vehicles

The market for electric vehicles (EVs) is an exciting one with so many companies investing in new technologies. POSCO also hopes to extend its customized material and technology solutions to EV manufacturers. Last October, the company held the Global EV Materials Forum to showcase four of its core business areas: lightweight bodies, batteries, motors and charging infrastructure. More than 380 clients took part in the forum to learn about emerging trends and POSCO’s products and services including POSCO GIGA STEEL and commercially produced lithium batteries for EVs.

POSCO is a solutions provider for EV manufacturers. (Source: Bloomberg)

6. POSCO’s new marketing approach

For the first time ever, POSCO created and aired a TV commercial highlighting a specific product, instead of its corporate brand. This marks POSCO’s first B2C marketing effort and features the company’s innovative auto steel, POSCO GIGA STEEL. The commercial compares POSCO GIGA STEEL to aluminum, another widely-used lightweight material in a visual demonstration so that everyday drivers can better understand the benefits of a stronger yet lighter material.

7. Going for 10 million tons of automotive steel

On April 26, POSCO completed 7CGL, a new steel production facility in Gwangyang, Korea, designed exclusively for the production of POSCO GIGA STEEL. 7CGL has an annual capacity of 500,000 tons and is the world’s first plant capable of producing both 1.5 giga-level galva-annealed (GA) and galvanized (GI) steel sheets.

POSCO Completed 7CGL on April 26, 2017. (Source: Business Korea)

In addition, POSCO managed to reduce investment funds and secure cost competitiveness by designing and constructing 7CGL’s core facilities based on accumulated facility technologies and operating know-how. The 7CGL is POSCO’s 12th plant exclusively for automotive steel sheets, and POSCO aims to sell 10 million tons of automotive steel in 2018 globally.  

8. Setting new records with high manganese

POSCO became the first company in the world to commercialize the technology for producing high manganese using fusible ferroalloys. The technology took KRW 5.5 billion of research and development costs and four years to complete.

POSCO is the first company in the world to commercialize its high manganese production technology. (Source: Eramet)

The core part of POSCO’s high manganese production process is PosLM (POSCO Liquid Manganese), a special holding furnace that stores manganese ferroalloys in a fusible state. POSCO’s technology reduces the production time for high manganese steel by more than 50 percent as well as increases slab production efficiency. PosLM was jointly researched and developed by the Institute of Technology and POSCO M-tech.

9. Bringing home the lithium

On February 7, POSCO opened its PosLX (POSCO Lithium Extraction) plant with an annual capacity of 2,500 tons. The plant is the first plant in Korea capable of commercial lithium production. The technology took 7 years to perfect, but it was well worth it. The production process for high purity lithium now takes just 3 months, compared to the previous 12 to 18 months.

POSCO is making lithium extraction more efficient and sustainable. (Source: Mining)

In the past, Korean manufacturers imported the entire quantity of lithium they needed. With POSCO’s PosLX plant, partners now have access to a local supply of lithium. Moreover, POSCO plans to use lithium phosphate extracted from wasted secondary batteries as raw materials, in keeping with the company’s sustainability standards.

POSCO will continue building on a successful 2017 in the new year, by tackling new challenges and continuing to provide its partners with customized and optimal solutions in all business areas.

Cover photo courtesy of Hitech Building Solutions.

Smart factories are bringing AI, IoT and Big Data to the manufacturing industry.

#1 How Smart Factories are Changing the Manufacturing Industry

The Fourth Industrial Revolution is bringing AI, IoT and other automated technologies into people’s lives and changing the way they live and interact with one another. It is also bringing about change in the manufacturing industry as more companies embrace smart factories to further enhance efficiency, performance and safety. Take a deeper look at how smart factories are reinventing the manufacturing industry.

SEE ALSO: How Factories Produce Steel- the Smart Way

POSCO GIGA STEEL also offers electric vehicle manufacturers a lightweight material solution.

#2 POSCO GIGA STEEL Increases Strength, Improves Safety in Autos

This year, POSCO GIGA STEEL set a new, industry standard for strength and formability for auto steel. The advanced high-strength steel (AHSS) is an automaker’s dream come true as it falls into the strongest category of steel commercially available today. Plus, its lightweight property makes it the perfect solution for manufacturers trying to design safe, high-performing and sustainable vehicles.

SEE ALSO: Ask an Expert: Has Steel Achieved Its Peak in Lightweighting?

Lithium-ion batteries are found in some of the most popular devices available today. (Source: BGR)

#3 POSCO’s Innovation Shapes the Ever-Growing Lithium Market

POSCO is the world’s 5th largest steel producer, but it’s got more up its sleeves than just steel. This year, POSCO developed game-changing technology that extracts lithium from water in just 8 hours to one month. Traditionally the task takes anywhere from 12 to 18 months. To add, the new technology can achieve a purity rate of 99.9 percent and increases the lithium recovery rate to over 80 percent.

Lithium is a central component in rechargeable batteries for electronics such as smartphones, laptops and most importantly, electric vehicles (EVs). Heading into 2018, POSCO is well-positioned to be an industry leader in a rapidly-growing market for EV batteries.

SEE ALSO: The Fuel of Tomorrow: Mining Lithium for Tomorrow’s Cars

POSCO CEO Kwon Ohjoon fires up Pohang Blast Furnace No.3

#4 POSCO Gets “Smart” with Pohang Blast Furnace No.3

In June, one of POSCO’s oldest and the world’s 5th largest blast furnace got a makeover with some added AI. After undergoing 102 days of repairs, Pohang Blast Furnace No.3 came back much bigger with an expanded furnace volume of 5600㎥, compared to its original volume of 3795㎥ from its beginnings in 1978. Plus, Pohang Blast Furnace No.3 now has smart sensors to monitor operations and detect malfunctions or accidents before they happen.

SEE ALSO: How to Make Steel with an Old(ie but Goodie) Blast Furnace

Ajay Telrandhe in Quality Assurance and Manish Kochar & Chetan Waghchoure in Sales talk to the Steel Wire.

#5 Ask an Expert: POSCO Leads India’s Growing Automotive Steel Market

POSCO Maharashtra is POSCO’s leading subsidiary. Three of their employees gave the Steel Wire an insider’s look into the company’s success, despite a challenging market environment and government restrictions. The team in India implemented positive changes in the company’s steel quality, production processes and customer service to become a leading solution-provider for their automotive partners.

SEE ALSO: Revving Up for Growth: India’s Automotive Market is In Full Gear

EVs, autonomous vehicles and shared mobility will drastically change the auto industry. (Source: Electrek)

#6 Ask an Expert: Electric Vehicles and the Future of the Automotive Market

Stephen Zoepf, executive director at the Center for Automotive Research at Stanford University, was the first speaker at POSCO’s 2017 Global EV Materials Forum. Zoepf shared his vision of what the future automotive market will look like and its implications for car manufacturers, suppliers and drivers. According to research, 60 percent of the cars in the U.S. will be running on electric batteries by 2030, and those cars will mostly be part of a shared mobility service. Traditional ways of car production, distribution and consumption will undergo massive change and companies will have to find ways to stay competitive in the new market dynamics.

SEE ALSO: The Forgotten Fleet: Looking Back on Early Electric Vehicles for a Better Future

Steel dresses from Naim Josefi’s 2017 F/W GANGS collection. (Source: Naim Josefi)

#7 Ask an Expert: Fashion Forward with Steel

Fashion designer Naim Josefi opened new possibilities for steel application with his 2017 F/W GANGS collection which included dresses made of elaborate steel sequins and laser-printed jeans. He is also known for his 3D-printed high heels that provide the perfect fit. The artist has a passion for fusing technology into his work and finding more sustainable ways to create beautiful clothes and says he will continue to use steel as a high-tech, fashion material.

Heading into a new year in 2018, the Steel Wire promises to be the best source of steel industry news and continue to provide exclusive, insightful and interesting stories.

Marco Rosignoli – Bridge Building Expert

Marco Rosignoli has more than 20 years of experience in bridge construction and design. (Source: San Francisco Public Press)

Marco Rosignoli is an expert in bridge design, construction, forensic engineering, consulting and education, with over 37 years of experience in 21 countries. Through a two-part series, Rosignoli gave readers an in-depth look into emerging megacities and their infrastructure needs. According to Rosignoli, efficient transportation is the key to an economically competitive city, and megacities will call for mega-sized bridges made of high-quality steel. Read on to find out more.

Part one: Ask an Expert: Building Bridges for Megacities

Part two: Ask an Expert: Building Bridges for Megacities – Part 2

Naim Josefi – Fashion Designer

Naim Josefi is an innovative designer who mixes fashion and technology. (Source: Naim Josefi)

Naim Josefi runs a fashion company based in Stockholm, Sweden, and is widely known for winning Project Runway Sweden back in 2012. Josefi is a fashion designer who is blurring the boundaries between science and fashion as his projects include steel dresses, 3D printed shoes and laser-printed jeans. Find out why the designer chooses to work with steel and incorporate new technologies into his art.

Read on: Ask an Expert: Fashion Forward with Steel

Professor Bill Arnold – Oil Industry Expert

Bill Arnold is a professor in the practice of energy management at Rice University’s Jones Graduate School of Business. Previously, Professor Arnold was Royal Dutch Shell’s Washington director of international government relations and senior counsel for the Middle East, Latin America and North Africa for 16 years.

Bill Arnold is an Energy Management Professor at Rice University. (Source: Society of Petroleum Engineers)

Professor Arnold gave readers an insider’s analysis of the rapidly-changing oil industry marked by unpredictable oil prices. He says, in the midst of change, there are newly-developing business opportunities and alternative sources of fuel such as natural gas that will subsequently create more demand for high-quality steel.   

Find out more: Ask an Expert: The Role of Steel in a Changing Oil Industry

Park Jong-jae – Automotive Columnist

Park Jong-jae is a motorsports columnist and the former editor-in-chief at F1 Racing Korea. Back in May, Park contributed a two-part series on POSCO GIGA STEEL. In the first part, Park reinforced the need for lightweight materials in the auto industry and highlighted some of the most successful cases of POSCO GIGA STEEL application from POSCO’s partners including GM Korea and Ssangyong Motors.

2016 Chevy Cruze Body Structure with POSCO GIGA STEEL. (Source: World Auto Steel)

Read more: Ask an Expert: POSCO GIGA STEEL Opens Door to the Future of the Auto Industry

In part two, he took readers through the 6 different types of POSCO GIGA STEEL and how they can benefit different parts of a vehicle.

There are 6 types of POSCO GIGA STEEL. (Source: Astro Awani)

Find more information: Ask an Expert: POSCO GIGA STEEL Goes Beyond the Limits of Traditional Lightweight Materials

Gil Bruvel – Steel Artist

Gil Bruvel is a veteran artist who creates sculptures using stainless steel. (Source: Gil Bruvel)

Gil Bruvel is an artist who works with stainless steel to create beautifully crafted sculptures of the human form. For the past 40 years, Bruvel has dedicated himself to painting, drawing and sculpting. He worked on a series of stainless steel sculpture for his Flow Series that depict aspects of nature mixed with the human body. Check out his creations and learn more about why Bruvel chooses to work artistically with steel.

Take a look: Ask an Expert: Capturing the Fluidity of Life in Ribbons of Steel – An Interview with Gil Bruvel

POSCO’s Masters of Korea

Every year, POSCO names its Masters of Korea. These masters are employees who have become experts in their respective fields through years of hard work and dedication. All 3 Masters of 2017 contributed to POSCO by developing new technologies, coming up with groundbreaking ideas and finding solutions to make POSCO safer, more efficient and highly competitive in the global steel industry. Find out who they are and their journey to becoming the POSCO Masters of Korea.

Master Nam Tae-Gyu has 40 years of experience working for POSCO.

Master Nam Tae-Gyu: POSCO Masters: 40 Years in the Making

Suh Gwang-Il examines machinery at a POSCO steel mill with colleagues.

Master Suh Gwang-Il: POSCO Masters: A Cold Rolling Expert

Master Kim Yong-Hoon played a key role in automating POSCO’s production systems.

Master Kim Yong-Hoon: POSCO Masters: Leading the Way Towards Automation

Thank you to the experts that helped make the Steel Wire shine like steel in 2017. In 2018, we look forward to even more opportunities to collaborate with even more experts to help provide you, our readers, a deeper understanding of steel and its applicability across industries.

The future may look uncertain for commercial aviation, but the increasing demand for passenger flights, the need for new aircraft as well as new innovations are expected to stimulate the industry in 2018 and beyond.

SEE ALSO: Game Changers in Aviation that Will Empower the Way We Fly

Smaller planes, more frequent miles

City pairs, or pairs of departure and arrival airports, are growing around the globe. According to Aviation Week Network’s 2018 Fleet & MRO Forecasts, South Asia’s routes will increase from 650 in 2006 to 1200 by 2026. African routes will expand from 1400 to 2600 in the same time frame and Russia and the CIS region will see an additional 1000 routes by 2026.

For such city pairs, 100 to 150-seat aircrafts are ideal, and airlines will opt to add more of the crafts to their fleet over larger crafts that are hard to fill.

Smaller, 100 to 150-seat planes will be in higher demand. (Source: Quora)

The growing global demand for passenger flights will further contribute to the need for more small-sized planes. In 2016, a total of 3.8 billion passengers flew the skies, and the number is projected to reach 4.3 billion in 2018.

Out with the old, in with the new

In the next 20 years, most of the existing fleet of aircraft will retire, and be replaced with new aircrafts. This will create an increased demand for airplane parts, new technology and labor. The overall volume of the global fleet will increase at an average yearly rate of 3.1 percent, and a major bulk of the supply is projected to come from the Asia-Pacific region.

MRO for older aircraft will open new business opportunities. (Source: Crescent Capital)

To add, the cost of maintenance, repairs and overhaul (MRO) for aircrafts older than 10 years will reach USD 1 trillion for the first time ever, creating more business opportunities for suppliers and service providers.

Military aircraft will play its part in the Aviation Industry

In the U.S., the government is planning to spend USD 400 billion on fifth generation F-35 fighter jets made by Lockheed Martin Corp, and 11 other countries are currently working out a purchase deal worth over USD 37 billion.

Fifth generation F-35 fighter jets are one of the most advanced military jets ever. (Source: Gizmodo)

Moreover, USD 67.3 billion is projected to be spent on the MRO of the world’s military aircraft, up 14.9 percent from USD 58.6 billion in 2008. With increasing tensions all over the world and subsequent rise in defense spending, demand for military aircraft will likely continue.

And then there’s flying cars

Although not traditionally counted as part of the aviation industry, flying cars are popping up in cities around the world and blurring the lines that define different transportation industries. With increasing investment, flying vehicles may become a reality in the next couple of years, and most will be flying on clean fuel. Here are some companies with plans to launch flying cars.

Volvo’s TF-X is one of several flying cars in development. (Source: The Verge)

Uber

Uber recently announced its partnership with NASA to develop an electric aircraft taxi service called UberAIR, planned to be up and running in 2020. If successful, the vehicle will be quieter than a helicopter, travel up to 150 mph and charging will only take about 4 minutes. Uber has plans to test the service shortly in L.A., after successful trials in Dallas and Dubai. If all goes well, travel time in L.A.’s rush hour can decrease by a third.

Airbus

Airbus is looking to launch their CityAirBus in the skies for taxi service in 2018. The all-electric vertical takeoff vehicles will transport people up to 80 mph over congested traffic to destinations like rooftops, train stations and airports. The vehicles can carry up to 4 passengers at a time and travel up to 80 mph. In the beginning stages of its launch, Airbus plans to have a pilot on board the flights over fixed routes, but will work towards autonomous operations.

Volvo

Geely, which is the parent company that owns Volvo, recently purchased a flying-car startup, Terrafugia. The company aims to have its flying cars in operation by 2019, with a range of 400 miles on a single charge and travel speed of up to 100 mph. Terrafugia already received the U.S. Federal Aviation Administration’s (FAA) approval to start flying. They are also working on their next model, the TF-X, which can fly up to 200 mph and will cost around EUR 180,000.

The aviation industry will see many changes in the coming years. Although steeply rising oil prices will play a major factor in the profitability of the industry, the rising demand for passenger flights, increased military spending and new innovations will lead production and create new business opportunities for 2018 and beyond.

Weather Events of 2017

2017 saw some of the worst natural disasters across the globe. The Atlantic hurricane season hit hard, and Hurricanes Harvey, Irma and Maria were especially devastating. Hurricane Harvey caused 82 direct deaths, and an estimated USD 180 billion worth of damage. Hurricane Irma swept across 9 U.S. states leaving 75 people dead and damage costs of USD 50 to 100 billion. Hurricane Maria is the worst natural disaster on record in Dominica with the official death toll at 51, but over 900 cremations have taken place in Puerto Rico following the storm.

The aftermath of Hurricane Harvey shows the importance of resistant housing. (Source: CNN)

In addition, typhoons, tornados and other weather events wreaked havoc on communities around the globe raising awareness for the need for better emergency and disaster relief systems and stronger shelters to withstand natural disasters.

Natural-Disaster-Resistant Homes

For people living in areas prone to natural disasters, a resistant home can make the difference between total property loss and a safe haven. Worldwide, home builders and buyers alike are prioritizing the home’s ability to withstand natural disasters, leading to innovative architectural feats.

The Tsunami House was built to withstand natural disasters. (Source: My Fancy House)

On Camano Island in Washington State, the “Tsunami House” is made to be a safe waterfront home, able to withstand stormy waters. The main living level was built five feet above ground, and the foundations are built on pilings capable of withstanding high-velocity waves. The lower home area was designed with breakaway walls. For both strength and aesthetic purposes, this house contains steel inside and out, with composite and galvanized exterior siding, aluminum windows, and milled finish steel materials indoors. A steel staircase structure ensures safe passage.

The SURVIV(AL) House is sustainable and has a safe room in case of hurricanes or tornadoes. (Source: Inhabitat)

Another example of a home built to survive natural disasters is the SURVIV(AL) hurricane proof house is a solar-powered home with a steel-encased safe room built to withstand the effects of extreme weather like hurricanes and tornadoes. Students from the University of Alabama created this home with a safe room that can withstand a two-by-four plank landing at 200 mph.

The Ophir home sits on a hillside with exposed steel frames to withstand earthquakes. (Source: Inhabitat)

The Ophir home was built in 2010 by a couple in New Zealand following a 6.3 magnitude earthquake that forced many people from their homes and community. The couple, however, built their home back up from scratch, but this time, made sure it would not collapse under any circumstances. Not only can the home withstand earthquakes, it is designed to maximize exposure to sunlight for sustainable living as well. A distinctive feature of the home is its exposed steel frames that support the concrete walls.

The Benefits of Building with Steel    

Steel is one of the most popular materials for construction, but its properties make it especially valuable for natural-disaster-resistant homes. Steel has a high strength to weight ratio for durability, without the heft and its associated transport costs. It requires very little maintenance, even when used as an exterior surface, and will withstand the effects of time. It is also an eco-friendly, cost-efficient material for construction.

Steel Frames are ideal for the construction of natural disaster resistant homes. (Source: Stratco)

In fact, steel can withstand forces up to 150 mph as an exterior material, without becoming damaged. Steel is also an excellent reinforcement when used with concrete, offering the stiffness, strength and ductility needed to help a building withstand damage from events like earthquakes. As part of a building’s foundation structure, steel reinforcements help anchor the foundation, and the entire home, keeping it where it belongs through wind, waves, quakes and rain.

The damage left behind by natural disasters this year show that the effects last well beyond the initial onset. While there is no such thing as a completely weather-proof building, steel can offer a great deal of security and help minimize the destructive outcomes of Mother Nature.

Cover photo courtesy of CENHS.

His beginnings at Gwangyang Steel Works

After entering the company, Kim Yong-hoon directly operated the hot-coil production line at the No. 2 Hot Rolling Mill’s operation cabin. At the time, all of the hot rolling equipment had to be operated manually, and Kim operated the speed drive which controlled tension during the rolling process and the reduction operation which determined the thickness of the sheets of steel and the actual rolling itself. Because everything was done manually, workers learned through experience, and new workers made lots of costly mistakes. Dealing with the aftermath of accidents was another physical burden on the workers.

Kim Yong-Hoon working at an operation board at the No. 2 Hot Rolling Mill in 1993

Kim recalls, “One time, a foreign guest visited the mills. He approached me for a handshake, but I couldn’t take my hands off of the operation board for even a second to shake his hand. That’s how focused you had to be to operate the mills back then. After 13 years of doing that, I knew we needed an automated system. That’s why in 2003, I willingly joined the Finishing Mill No Touch Operation Task Force Team (TFT).” The TFT worked to implement an automated system, but when they could not produce the desired results in a year, the team was dismantled.

Following the TFT, Kim Yong-Hoon worked in facility management and quality assurance. In order to produce high-quality products and minimize the number of defects, workers had to be flawless in facility management and operations. Again, Kim knew that the only way to achieve this was through automated operations, but it was too difficult to implement an automated system in an existing mill.  

A New TFT, A New Opportunity

As demand for high-strength steels surged in 2012, including for automotive steel sheets and API steel sheets (oil pipelines, oil-related structural steel products, etc.), POSCO decided to establish a TFT for the construction of the No. 4 Hot Rolling Mill at Gwangyang Steel Works.  Kim Yong-hoon, who was eager to apply automated systems and enhanced the quality of steel products, joined the TFT.

The Opening of the No. 4 Hot Rolling Mill at Gwangyang Steel Works in 2014

The construction of the No. 4 Hot Rolling Mill was special because it was the first mill to be built independently, without relying on Japanese firms that previously provided all the technology and equipment. In order to become technologically independent, the TFT had to research everything from scratch. That way, they could work in the automated operations systems from the design stage. In the end, the No. 4 Hot Rolling Mill opened in Gwangyang on October 30, 2014. The automation technology Kim and the TFT applied to the mill greatly increased the quality and quantity of production of high strength steels. However, Kim Yong-Hoon didn’t stop there and continued to enhance the mill’s technology.

FM Full-Length Hydraulic Oil Application Technology

Kim was the first in Korea to come up with the finishing mill (FM) full-length hydraulic oil application technology and applied it to the No. 4 Hot Rolling Mill. This new technology ensures the quality of high-strength steel surfaces in its finishing stage.

Traditionally, the rolling process for high-strength steels is more difficult because when the tough material passes through the rollers, it causes severe rolling fatigue and vibration due to high resistance. However, there is a way to eliminate rolling fatigue and vibration. By spraying oil on the rolling equipment, an oil film is formed between the roller and the rolled material. This oil film can transmit a large amount of force with less effort, meaning the steel will roll with less fatigue and vibration. While using hydraulic oil is common, what is different about this technology is that the oil can be applied to the full length of the rolled material, without worrying about slippage.

Kim Yong-Hoon checking on the equipment at the No. 4 Hot Rolling Mill

“I worked closely with the research department and equipment engineers to develop this technology. We ultimately came up with a way to remove the oil as soon as one roll is finished, before the next one begins to eliminate slippage. We got rid of the misconception that you can’t spray oil on the full length of the rolled material. As a result, we decreased the occurrence of scales from 0.83 percent in 2015 to 0.23 percent in the first half of 2017. The number of times irregular replacements occurred decreased from 20 times in 2015 to 7 times in 2017. We also expanded giga-grade steel production from 20 steel grades in 2015 to 30 steel grades in the first quarter of 2017. Due to the impressive results, the technology was chosen as a second-grade proposal this year.”

No Touch Operation Technology

Kim then went on to find implement the use of big data at the mill for increased efficiency and performance. He took the settings that the operators inputted manually for the operation equipment and turned it into big data in the form of an operations table, and continuously accumulated data for the automatic operations equipment program, or No Touch Operations.

“I vowed to implement the No Touch operations technology to the  No. 4 Hot Rolling Mill from its early construction stage. Because it was my first time, I made numerous mistakes. However, after a year of accumulating data on the shape of the rollers and on the final crown, we are now entering the stabilization phase. Even now, we are gathering significant data to increase the accuracy and efficiency of operations and we are updating the information whenever we have to apply it to a new material. The data table is really the key to the No. 4 Hot Rolling Mill’s success.”

Kim further applied the No Touch operation technology to speed operations to keep the tension of the rolled material constant and prevent the material from leaning to the left or right using loopers.  Kim says, “This process also took one year of research and failures to develop. The new hydraulic looper is 5 times faster than traditional motor loopers. The increased efficiency allowed us to go from needing 2 operations desks to only one and we allocated the remaining speed driver to quality improvement work. As a result, we have increased the added value of high strength steels produced at the No. 4 hot strip rolling mill.”

Equipped with all the new technology, the No. 4 Hot Rolling Mill surpassed the record production capacity of 3.5 million tons and reached 3.9 million tons in 2015 and 4.1 million tons in 2016. To add, the production share of POSCO’s World Premium products for the No. 4 Hot Rolling Mill increased from 44.3 percent in 2015 to 67.3 percent in the fourth quarter of 2016 and reached 71.2 percent in the first quarter of 2017. The work rate also increased from 92.42 percent in 2015 to 96.02 percent this year and the quality nonconformity rate dropped from 1.67 percent to 0.64 percent in the same time span.

The Mindset of a Master

Kim Yong-Hoon was able to come up with numerous improvements to the operation systems at POSCO’s No. 4 Hot Rolling Mill because he views everything as a potential problem. He is always looking for ways to improve the production process and equipment, even if things appear to be working fine.

Kim’s goals for the future are straightforward. “We will do our best to make a sustainable POSCO by lowering the cost of products and raising the quality and production of high value-added steel.” His consciousness of potential problems and solutions is what lead to his achievements that include 18 proposals for representative registration and 11 proposals for joint participation. He also obtained a patent for his Variable Hot-Rolled Bite Cooler Header, which was awarded the A-grade by the POSCO Research Institute. This year, he is a POSCO Master of Korea, and he shows no signs of slowing down in his search for new technology and innovations to prevent accidents and improve POSCO’s products.

The 2008 Financial Crisis was a blow to the global automotive industry and its suppliers. It took years to recover, but the economy did start showing signs of growth. McKinsey&Company’s 2013 report, The road to 2020 and beyond: What’s driving the global automotive industry, painted a positive picture of the global automotive market with profits projected to reach EUR 79 billion by 2020, up from EUR 54 billion in 2012, with China responsible for 60 percent of profits.

Their 2016 report, Automotive revolution – perspective towards 2030, offered a similar outlook. Overall global car sales will continue to grow, but at about a 2 percent growth rate, down 1.6 percent from the last five years. New market trends such as electric/autonomous vehicles, shared mobility and stricter environmental regulations will disrupt the market with new challenges and opportunities, but what remains constant is that the majority of growth in global automotive sales will be lead by the rising middle class of emerging markets, namely in India and China.

Thousands of vehicles are scrapped in the Chinese government’s efforts to reduce emissions. (Source: The Daily Mail)

Subsequently, China reached record vehicle sales in 2016. However, in April 2017, it recorded the lowest number of sales in the past two years for passenger cars, down 3.7 percent from 2015. This follows a national sales tax rise early in 2017 to 7.5 percent, coupled with a general decrease in demand for cars as consumption is reaching a plateau. Moreover, China’s sales tax will increase again to 10 percent in 2018.

India’s Booming Automotive Industry

Unlike China, India’s automotive market shows little signs of slowing down. India is now the world’s fastest growing economy as their GDP is projected to increase by 7.2 percent from 2017 to 2018. Their middle class is estimated to triple by 2025, reaching 89 million households.

The government of India is looking to the automotive industry to lead India’s economic growth, as outlined in its Automotive Mission Plan for 2016-2026 and “Make in India” initiative. Under such plans, the government will work towards creating an additional 65 million jobs in the automotive market and a 500 percent increase in vehicle exports by 2026.

A full parking lot of Renault cars reflects the massive automotive market in India. (Source: The New York Times)

It’s no surprise that Foreign Direct Investment (FDI) is pouring in. From 2000 to 2016, India’s automotive industry alone attracted USD 15.79 billion in FDI. For investors, India’s growing middle class of consumers is as attractive as their vast and low-cost labor.

POSCO Maharashtra in India

POSCO Maharashtra is one automotive supplier that is echoing the growth of the Indian automotive market. Their 2Q17 unaudited earnings report showed significant growth from just a year before in 2016. The reported revenue was USD 331.7 million, compared to USD 174.7 million in 2016. The company’s operating profit was USD 32.6 million, up from USD 3.5 million in 2016. Finally, their net profit was USD 22.9 million, another significant increase from USD 15.9 million in 2016.

*Earnings figures were converted from Korean won to U.S. dollars using August 22, 2017, exchange rates.

The POSCO Maharashtra Plant in India

In May of this year, POSCO Maharashtra signed a MoU with Essar Steel to supply 1.1 million tons of flat steel products during the 2017 fiscal year. This is the second year of partnership between the two companies, but the volume of steel POSCO Maharashtra will supply is 30 percent higher than in 2016.

The growing business reflects the work philosophy of POSCO Maharashtra employees: “If [we] supply quality material, they’ll come back again and again. So that’s what we’re doing right now. Although our products might be priced a bit higher in the Indian market, we are supplying quality material and our customers continue to be loyal because they understand that value.”- Chetan Waghchoure, sales representative for POSCO Maharashtra. Read the full interview here.

POSCO Maharashtra’s Chetan Waghchoure during an interview with The Steel Wire

POSCO Maharashtra is taking full advantage of the thriving automotive industry in India and continues to expand its business by reducing production and inventory costs, increasing performance and efficiency and planning to incorporate AI technology into their future production processes.

Market indicators point to India to drive the profitability of the automotive industry. India’s growing consumption of vehicles, open business environment and vast labor force will continue to attract foreign investment and new businesses. The best part is that India is not even close to being fully developed, meaning brighter prospects for future growth and good news for manufacturers and suppliers.

POSCO continues to contribute to the growing steel industry by producing large amounts of high-quality steel for its partners, and has its sights on non-steel businesses as well. The continued efforts to stay ahead of global trends, provide solutions to partners as well as to produce the highest quality steel are what keep POSCO in the top ranks.

Here are 6 more memorable highlights from 2017 so far.

1. POSCO’s First Lithium Extraction Plant

On February 7th, POSCO opened its first lithium extraction plant, PosLX at Gwangyang Works in Korea. It is expected to produce 2500 tons of lithium carbonate per year, making POSCO the first company to produce lithium on a commercial scale in Korea.

The opening ceremony of PosLX

Traditionally, the process of extracting lithium takes 12 to 18 months. In comparison, POSCO’s new, sustainable technology only requires as little as 8 hours up to a maximum of one month to extract high-purity lithium. The materials produced at PosLX will supply LG Chem, Samsung SDI and POSCO ESM, a subsidiary company that specializes in cathode materials for secondary batteries.

2. Leading Supplier of Electric Steel Plates

On February 20, POSCO opened its newly-expanded, non-oriented silicon steel facility for producing environmentally-friendly electric vehicle drive motors. The expansion increased POSCO’s output of non-oriented silicon steel (Hyper NO) from 80,000 to 160,000 tons, making POSCO the leading supplier of electric steel plates both domestically and internationally.

POSCO CEO Ohjoon Kwon at the non-oriented silicon steel facility (Source: MK News)

The demand for environmentally friendly vehicles is growing, and with it the demand for top-grade electric steel plates. In 2020, the projected demand for such parts will reach more than 1 million tons. POSCO has its eyes on the market, aiming to develop high-quality, customized materials for electric vehicle manufacturers.

3. Release of POSCO’s GIGA STEEL Ad

In March, POSCO ran a nationwide TV ad for POSCO GIGA STEEL in Korea to showcase the superiority of POSCO’s next-generation automotive steel material. This is the first time POSCO put out a specific steel product and not the company brand at the forefront of an ad campaign. In order to convey the strength and light weight of the product, the advertisement included a strength test comparing GIGA STEEL to aluminum. The test proved POSCO GIGA STEEL to be over three times stronger than aluminum.

4. Commercialization of a High Manganese Steel Production Technology

In April, POSCO commercialized the world’s first high manganese steel production process technology using molten manganese ferroalloy (FeMn). This technology takes place at PosLM (POSCO Liquid Manganese), a heat insulation facility that can store high-purity molten ferromanganese alloy. The technology boosts profitability by reducing the processing time by half and increasing production efficiency by more than 10 percent using a non-solid type of molten iron.

Hot Liquid Steel

5.  Completion of 7CGL for POSCO GIGA STEEL

On April 26, POSCO completed the world’s first steel plate factory specifically for GIGA STEEL. 7CGL, which has an annual production capacity of 500,000 tons, is attracting attention as the world’s first factory to produce both GA (hot-dip galvannealed) and GI (hot-dip galvanized) steel plates among 1.5-class automobiles. POSCO secured its position as a global automotive steel plate maker through the completion of 7CGL, its 12th steel plate factory. POSCO has been able to reduce investment costs and secure cost competitiveness by carrying out both factory design and construction internally.

Opening ceremony for 7CGL (Source: Business Korea)

6. Completion of POSCO’s Steel Forming Laboratory

On May 11, POSCO completed their Steel Forming Laboratory at the POSCO’s Global R&D Center in Songdo, Korea, built to provide customized support for partners. POSCO is building a one-stop development system from technology development to production verification. At the core of this program is the advanced customer-oriented research infrastructure that can evaluate products in advance and develop leading technologies in a production environment similar to that of POSCO’s customers. This development will further strengthen POSCO’s solution marketing 2.0.

The Steel Forming Laboratory at POSCO’s Global R&D Center

Despite a difficult market environment, POSCO continues to provide high-quality steel products for its partners through close cooperation and customized research. Additionally, POSCO’s expansion into non-steel sectors will not only bring added value, but help POSCO stay ahead of the changes the fourth industrial revolution will bring.