According to the 2018 survey by Steel Market Development Institute (SMDI), 75 percent of consumers regard safety as the most crucial factor in their decision to purchase or lease a vehicle. However, just because consumers prioritize safety, that doesn’t mean they want extra bulkiness added to their car. As automakers strive to build sturdy yet lightweight vehicles, steel companies are trying to match the automakers’ such demands.

To compare aluminum and steel, the two materials automakers widely use, aluminum is lighter than steel. That’s because aluminum is about half as dense as iron on the periodic table. However, when it comes to tensile strength, steel is about four times stronger than the strongest aluminum alloys available. This means, aluminum parts need to increase the thickness to meet safety standards, while advanced high-strength steel (AHSS) can be made thinner, thereby reducing the total weight.

Dr. Jody N. Hall, vice president of the automotive market division at SMDI says, “You may get lower mass with aluminum, but it’s a relatively small difference, and you pay for that mass reduction because of the higher cost of the material.” According to Dr. Hall, such factor may impact the driving experience, and if all the parts are the aluminum, it can also reduce the space efficiency of the vehicle’s interior.

Is there a material that satisfies consumers’ demand for both vehicle strength and lightweight intelligent design?

l Global Automakers, All Eyes on AHSS

AHSS is increasingly getting recognized as the material to satisfy such consumer demands. AHSS is stronger than the conventional automotive steel sheet – with AHSS, thinner steel sheet can be used compared to the conventional steel sheet, which enables automakers to build vehicles that are both strong and lightweight.

AHSS is usually applied as structural steel like side sills, which are typically installed at the bottom of the vehicle’s door to minimize external impact.

Many 2019-model vehicles introduced at the North American International Auto Show last month share one common attribute, which is advanced high-strength steel structure. AHSS was represented in the composition of various vehicle segments and sizes, including the popular SUV, CUV and truck markets.

2019 Ram 1500, the winner of the 2019 North American Truck of the Year, includes 54 percent AHSS in the truck bed and cab, and 98 percent in the frame. AHSS eliminated 45kg (approx.100 pounds) while gaining stiffness and durability of the frame, making the new 2019 Ram the strongest model thus far.

▲2020 Toyota Corolla (SOURCE: 2019 Detroit Auto Show)

As for the 2020 Toyota Corolla, the increased use of AHSS enhanced body rigidity and occupant safety. The torsional rigidity is improved by 60 percent than its predecessor. 2019 Subaru Forester applied 31 percent AHSS for long-lasting quality, enhanced crash safety, and a quieter interior.

▲2019 Jeep Cherokee (Source: Detroit Auto Show)

To achieve lightweight in the body, 2019 Jeep Cherokee used 65 percent hot stamped, high-strength steels and AHSS. In addition, thanks in part to the AHSS used in the body, the 2019 Mercedes-Benz G-class lost 170kg (approx. 375 pounds). Steel aided in rigidity and load-bearing functions of the vehicle.

More than 65 AHSS-intensive vehicles debuted at major auto shows across North America in 2018 and in the NAIAS 2019, achieving lightweight in the body, higher tensile strength, and durability.

l Giga Steel, Light but Strong

Source: Detroit Auto Show

Industry expert consensus is that, with global regulations on automobile safety and CO2 stronger than ever, automakers’ inclination toward lightweight vehicles is inevitable. As automakers’ investments increase towards the future modes of transportation such as autonomous and electric vehicles, the key to successful investment is securing strong, durable, and cost-effective materials.

In the era of smart cars like electric cars and autonomous vehicles, POSCO has focused on developing future materials like Giga Steel. POSCO’s Giga Steel can significantly reduce the weight of automobiles.

POSCO’s Giga Steel is the next-generation steel plate that withstands the weight of 100kg per 1㎟ width. Its tensile strength is more than 960 MPa, which is equal to 1 Gigapascal, and that’s how POSCO Giga Steel came to be.

More specifically, a sheet of Giga Steel (10cm x 15cm) can withstand the weight of 1,500 mid-sized cars, each weighing one ton. Not only is Giga Steel three times stronger than aluminum, it also has excellent modability, making it an ideal material for constructing sturdy car frames.

*POSCO defines a steel sheet with a tensile strength of 780 megapascals (MPa) or higher as advanced high strength steel; Giga Steel has a tensile strength of 980 Mpa (1 Gigapascal) or more withstanding a load of 100 kg per square millimeter.

POSCO successfully created materials that are both sturdy and moldable, like TWIP steel and PosM-XF.

POSCO will use Giga Steel to curb the spread of steel-substitutes like aluminum and carbon fiber reinforced plastics (CFRP), solidifying steel’s position as the future material.

The North American International Auto Show 2019 demonstrated that the demand for stronger and lighter automotive steels will continue to expand. Dr. Hall of the SMDI reiterated that AHSS is “the best choice for automakers, suppliers, and consumers” because of its strength, durability, and cost-effectiveness. Along with the AHSS, Giga Steel is likely to be applied more widely in the global auto market.

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.

More and more automakers are adding EVs to their fleet. (Source: Engineering and Technology)

While all this sounds promising for the environment, EVs don’t automatically translate into lower GHG emissions. According to World Auto Steel (WAS), the emissions from vehicle production will be greater than the amount of emissions from driving. As such, it is becoming increasingly important for manufacturers, policymakers and consumers alike to view material options by considering its life cycle assessment (LCA).

World Auto Steel Case Study

WAS conducted a case study in which they compared two popular lightweight materials for EVS; aluminum and Advanced High-Strength Steel (AHSS). The study followed the University of California Santa Barbara Automotive Energy & GHG Model (UCSB Model) for a comprehensive analysis of each material’s total energy use throughout its entire life cycle, from production to end of life recycling. For the study, WAS examined 1,000,000 BEVs of equal range that were made up of either entirely aluminum or AHSS.

BEVs made of AHSS require over 15 percent less energy than aluminum cars. (Source: World Auto Steel)

The study found that automakers can make over 17 percent more BEVs made of AHSS than aluminum BEVs with the same amount of energy. In other words, with the energy it takes to make 1 million aluminum BEVs, automakers can make 1.17 million AHSS BEVs.

Why is AHSS More Energy Efficient?

Aluminum production requires 8 times more energy per kilogram than steel production because the production process of aluminum is much more complicated and involves more steps than steel production. The aluminum BEVs in the study used up 30 percent more energy than those made from AHSS throughout its entire life cycle. Plus steel is 100 percent recyclable and can be reused almost indefinitely.

There are many sources of emissions output involved in the entire life cycle of a vehicle. (Source: World Auto Steel)

This poses a serious need to reexamine existing policies and regulations that only seek to reduce tailpipe emissions. By also taking into account emissions from the production of materials all the way to how a car is disposed at the end of its life cycle, automakers can grasp a better picture of the real impact of their choices on the environment.

A Sustainable Choice

As a solution-providing partner for automakers, steelmaker POSCO designed the perfect AHSS for cars that is lightweight, extremely strong, highly formable and environmentally friendly. POSCO GIGA STEEL belongs to the highest category for tensile strength of greater than 1GPa (Gigapascal). It can withstand more than 100 kg of force per square millimeter, making it 3 times stronger than aluminum. It is also 3.5 times cheaper than aluminum and 2.1 times cheaper to manufacture.

SEE ALSO: Infographic: Driving the Future with POSCO GIGA STEEL

POSCO GIGA STEEL is three times stronger than aluminum.

In 2016, POSCO sold 9 million tons of steel sheets for cars, making up 10 percent of the entire global automotive market for steel sheets. POSCO GIGA STEEL was designed to further improve the performance and efficiency of POSCO’s auto partners around the world. As the auto industry heads towards a future where environmentally-friendly EVs become the norm, POSCO will strive to equip its auto partners with the materials and tools necessary to stay ahead and competitive.

POSCO hosted the 2017 Global EV Materials Forum at the Songdo Global R&D Center in Incheon.

POSCO welcomed more than 380 local and overseas customers to the forum where they announced the current status of POSCO Group’s EV projects and strategies. The company also showcased its core EV technologies for high-value-added products such as motors, batteries and lightweight chassis/bodies.

During the forum, POSCO highlighted customer needs, market trends and development statuses in three areas: lightweight materials, traction motor cores and batteries. POSCO researchers also gave presentations on POSCO’s high-value-added products and solutions to share market insights and technological developments with the participants.

Participants listen to presentations at the 2017 Global EV Materials Forum.

In his keynote speech, In-hwan Oh, president of POSCO, said, “POSCO is in full preparation for the future of an electric vehicle ecosystem, to become a reliable partner to our customers.”

There were also external speakers at the forum, including Stephen Zoepf, Executive Director of the Center for Automotive Research at Stanford University, who spoke about “Electric Vehicles: Adapting to a Changing Marketplace.” Another external speaker was Martin Woehrle, senior director of BMW Korea, who gave a presentation on the trends in EV development.

In addition, POSCO held a separate exhibition at the venue consisting of four key product zones: motors, batteries, light-weight chassis/bodies and charging infrastructure. There was also an EV model on display in the Highlight Zone for a better understanding of the structure of EVs.

Visitors examine the electric Nissan Leaf

On display In the lightweight chassis/bodies exhibition zone was POSCO GIGA STEEL for lightweight chassis/bodies, which is lighter but much stronger than existing automotive steel sheets. Also on display was POSCO’s lithium materials for EV batteries; POSCO is the first company in Korea to commercially produce lithium for EV batteries.

In the motor zone was POSCO Daewoo’s a high-efficiency traction motor core for EVs made with POSCO’s Hyper NO, its highest-grade, non-oriented electrical steel. POSCO is already supplying it to major automakers.

The charging infrastructure zone showed POSCO ESM and POSCO Chemtech’s core materials of EV batteries, such as cathode and anode materials. In addition, POSCO ICT is the only company in Korea to provide a total-service electric vehicle charging infrastructure, including supply, installation and operation to membership management and supplementary services.

To close, POSCO pledged to become a “Total Solution Provider” for its partners in the auto industry bracing for the age of electric vehicles with its innovative technology, premium products and customized services.

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Contrary to popular belief, mass reduction does not automatically equal fuel savings, especially when it comes to urban driving. There are other factors that determine the fuel efficiency of a vehicle such as driving cycle, vehicle size and its powertrain. Until recently, there was a  lack of variety in engine types and powertrains, so even though automakers reduced the weight of car frames, they could not apply a complementary engine or powertrain to the lighter parts.

So, have automakers been lightweighting for nothing?

Of course not, in the past decade alone, engines and powertrains have also become extremely efficient through advancements in start-stop-systems and downsizing, and newer options including hybrids, electric batteries and range extenders that now allow automakers to capitalize on their lightweight materials.

Although there are several lightweight materials, below are 5 reasons why AHSS continues to be the lightweight material of choice for automakers:

1. Decision Makers Care About the Environment

Well, not everyone, but many countries around the world have started the process to phase out gasoline and diesel-fueled cars, including India and China, the two largest automotive markets in the world. Governments are taking serious action against climate change and it will reflect in their policies. Automakers are choosing to lightweight their vehicles for lower emission rates with AHSS, because not only is AHSS lightweight, there are no trade-offs with other vital features such as safety and cost-effectiveness.

2. Everyone’s Going Electric

Globally, automakers are investing in electric vehicles (EVs) in line with national and international environmental policies. However, EVs still have a ways to go before they become the norm. EVs will face the same safety requirements as regular cars, but with the added responsibility of protecting the battery and its flammable components during a crash.

In 2016 there were several car accidents involving the Tesla Model S, where leaked battery fluids caused fires. Automakers need to find a solution to make EVs as safe, and eventually, safer than traditional cars. As an innovative automotive material, AHSS was built for safety.

3. Safety is Always First

Safety is and should always be the number one priority for automakers, material providers and policymakers alike. Even with all the hype about autonomous driving and sensors, there is very little chance that policymakers will reverse the stringent safety regulations in place today. People want to feel safe, no matter what type of car they are getting into.  

2016 Smart Fortwo and the Mercedes S Class take part in a crash test (Source: Green Car Reports)

One possible material solution is Complex Phase (CP) steel, a type of POSCO GIGA STEEL for the vehicle’s side panels, bumper rails and door impact bars- the parts that determine the safety ratings of the vehicle. It has superior strength and shock-absorbing qualities, without the added weight of traditional high-strength materials, and that’s why carmakers such as GM Korea, Ssangyong Motors and Renault Samsung Motors all use POSCO GIGA STEEL.

4. Cost is Always Second

This goes for automakers as well as drivers on the consuming end. Drivers want lower costs without compromising safety and performance ratings, and desire fuel efficiency- a major reason why automakers are lightweighting.

Some automakers choose alternative materials such as aluminum and carbon fiber to meet lightweight requirements to find that not only are the materials more costly over steel, factories need an equipment overhaul to work with them. Moreover, there are additional costs related to training employees to work with new materials, whereas all auto manufacturers are familiar with welding and forming steel.  

Take a look at this infographic and see how AHSS stacks up against other lightweight materials in terms of cost and performance.  

5. It’s Not Over Till It’s Over

No two lightweight materials are the same when observed under the life-cycle approach, a comprehensive life cycle assessment of a material’s automotive carbon emissions from production to disposal. Often times, the process of manufacturing lightweight materials and improved powertrains result in more carbon emissions than they are saving.

The life cycle assessment can be used to determine the carbon output of a vehicle. (Source: World Auto Steel)

At the end of the day, steel has the lowest production-related emissions and can be recycled at the end of its lifecycle. Steel remains the most recycled material because it can be reapplied in different forms almost infinitely.

Automakers are increasingly incorporating lightweight materials to their new models. Although competition for the greatest market share of lightweight materials is fierce, AHSS is by far the leading material when it comes to lightweight solutions. According to McKinsey & Company’s Lightweight, Heavy Impact report, the percentage of high-strength materials used for cars will increase to 38 percent by 2030, compared to 15 percent in 2010. Steel continues to evolve according to the changing demands of the auto market, and for now, there is no other multi-solution material that can compete.

Cover photo courtesy of Hyundai.

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Below, The Steel Wire speaks with Choi Jaeyong, Manager at POSCO’s Environment & Energy Business Department and currently a research fellow at the World Steel Association, to discuss sustainable manufacturing trends in the steel industry as well as the evolving automotive steel industry.

What are some of the most exciting initiatives taking place in the steel industry to combat greenhouse emissions and to create more sustainable production methods?

First, we must realize that one of the main causes of greenhouse emissions comes from using fossil fuels for the reduction of iron ore. Therefore, any ideas to improve this process and reduce the use of fossil fuels will also help reduce greenhouse gases. One of the most exciting initiatives taking place in the steel industry is replacing coke with hydrogen on a partial basis as a reduction agent. However, this is only effective if the hydrogen is produced by non-carbon energy sources.

[clickToTweet tweet=”“The sustainable life cycle of steel helps automakers recycle old automobiles into brand-new cars.” ” quote=”“The sustainable life cycle of steel helps automakers recycle old automobiles into brand-new cars.” ” theme=”style6″]

In addition to finding fuel alternatives for blast furnaces, advancements in smart factory technologies, such as AI and IoT, are also helping create more sustainable production methods while significantly enhancing the decision making process. For instance, the digitalisation of the control systems to reduce variations in process parameters has helped reduce energy usage as well as unexpected defects. Moreover, IoT can help employees at worksites by preventing industrial accidents with regards to machinery and equipment.

What do you think steelmakers should do to become more energy efficient?

First of all, steelmakers should work to achieve best-in-class operational standards across all processes. This includes improvements in engineering, operations, reliability, yield, health, and safety. Second, employees should stay up-to-date on the latest developments in steel production to ensure that advancements are shared utilized across the entire industry. Third, we must use collaborative and innovative R&D techniques to make improvements throughout all processes. POSCO is already practicing the first two very well while the third continues to be a priority for POSCO CEO Ohjoon Kwon.

I believe there is no one single solution for energy management; however, if those of us in the steel industry remain enthusiastic about finding creative energy saving solutions, new ideas will continue to arise and evolve.

From your experience working with POSCO’s energy management systems, can you tell us what POSCO is doing to become more energy efficient?

Pohang Steelworks is one of the most intricate modern steel manufacturing sites in the world. We continuously look for improvements throughout all processes including in the combustion, gas, corrosion, mechanical, instrument & measurement engineering practices, and statistical analysis techniques. If problems are found they are analyzed to eliminate and prevent faults or delays.

Also, at Pohang Steelworks, each facility has their own characteristics from raw materials to end products. Producing coke, sinter, and pig iron is a near continuous process, but producing steel is a batch process. Respective rolling mills have different rolling schedules and maintenance periods. Upstream processes, such as the blast furnace, have a fixed maintenance schedule. Why is knowing the characteristics of the process important? The processes create by-product gases and if there is a break in the use of the gases, the furnace will need to be flared once the gasholders are full. This has a significant impact on the emissions intensity for the site. Pohang Works uses many kilometers of pipelines and multiple power plants in order to utilize all the by-product gases and my role is to eliminate the flaring ratio and to operate energy facilities with high efficiency. The most important job is to maintain the facilities so that they are in good condition and can operate when needed.

Inside steelmaking plant of POSCO (Image courtesy of World Steel Association)

For sites like POSCO, energy needs to be viewed holistically to be able to create a balanced energy generation system, which helps avoid waste in gas & electricity. There is a project currently underway to build a new integrated energy management system that will help optimize energy use and prevent waste.

More and more automakers around the world are focusing on sustainability and emission reduction. What kinds of benefits can sustainable materials like steel bring to the auto industry? Also, what is POSCO doing to help automakers manufacture more sustainable vehicles?

Steel is better than alternative materials like aluminum and carbon fiber composites for various reasons. Properties of steel vary greatly but it’s always adaptable to making new products for different end products. When the electric arc furnace (EAF) melts steel, it can be formed into a new product without a loss of quality. On the other hand, other alternative materials composed of alloys at a lower temperature remain as molten alloys, and they require additional processing to separate the various elements from the original material, which cannot always be done without a loss of quality. For steel, this is not a problem. Also, because of the sustainable life cycle of steel, automakers can recycle old automobiles into brand new cars without a reduction in quality.

Additionally, by replacing conventional steel materials with advanced high-strength steels (AHSS), drivers can reduce fuel usage by as much as 5% and greenhouse gas emissions by 6%.

POSCO has developed numerous lightweight solutions to enable automakers to produce lighter, more eco-friendly products with no reduction in strength and durability. Using more sustainable materials like POSCO GIGA STEEL can bring numerous benefits to the auto industry as it offers automakers the ability to produce stronger cars with fewer emissions.

For more information on POSCO GIGA STEEL, take a look at the 6 reasons why POSCO GIGA STEEL is Ideal for both automaker and consumers.

Q1. Despite several market challenges heading into 2016, POSCO Maharashtra has become POSCO’s most successful subsidiary. What would you credit with this quick turnaround?

Manish Kochar: At the beginning of last year, there were many import restrictions imposed by the government of India, and at the start of 2015 a lot of people were not sure whether we could even survive. We were merely a POSCO group company that was buying from POSCO Headquarters and selling in India. But we quickly adapted to the situation.

Because of the high costs of materials, we began to develop partnerships with local mills. Our Quality Assurance and Product Departments worked with these local mills to improve standards and help guarantee the same quality that our customers expect. This also reduced our inventory levels, which in turn reduced our inventory costs.

This was a very good move and I appreciate that management had the foresight and ability to make these collaborations possible. Otherwise, our journey would have been very different.

[clickToTweet tweet=”‘We worked with local mills to improve standards and help guarantee the same quality that our customers expect.'” quote=”‘We worked with local mills to improve standards and help guarantee the same quality that our customers expect.’ – Manish Kochar” theme=”style6″]

Chetan Waghchoure: First of all, we were able to succeed because of the direction from management. We have clearly defined strategies for each segment in terms of targets, market, and pricing, which are constantly under review. Because of this, we have been able to make improvements in production, logistics, and quality.

From 2015-2016 we were barely producing 80-90 thousand tons per month, but today we are reaching over 140 thousand tons each month. Additionally, we were able to cut the production process from two months to just 30 days. And, we made an effort to move away from small market segments where the prices are low and competition is very high. Instead, we changed our focus to producing high-quality products for auto, home appliances, and panels. This move gave us higher margins and more market share.

“Increasing the operating ratio helped reduce the operating cost and that indirectly affected our profitability.” – Ajay Telrandhe, Quality Assurance

Ajay Telrandhe: In addition to what Chetan and Manish have said, in the last 3-4 months, we have increased the operating ratio and plant utilization. While we were operating at around 70-75%, now it’s at almost 90%. Increasing the operating ratio helped reduce the operating cost and that indirectly affected our profitability. Because of this, we were able to enter into more non-auto segments and produce more exports.

Q2. POSCO prides itself on producing the most advanced, high-quality steel around the world. How important is quality at POSCO Maharashtra and how are you able to maintain quality standards with such rapid growth?

Chetan Waghchoure: If I supply material at a cheaper rate, the customer will come back one time. But if I 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.

“If I supply material at a cheaper rate, the customer will come back one time. But if I supply quality material, they’ll come back again and again.” – Chetan Waghchoure, Sales

Ajay Telrandhe: POSCO Maharashtra has very advanced inspection systems. From surface inspections to mechanical testings to calibration – those are all constantly maintained so that we can ensure delivery of uniform products to our customers.

Also, in the next few months, we will be adding an AI system for zinc coating. Maintaining a consistent coating weight for automotive steel is a highly specialized process and prone to error. By integrating advanced AI technology, we will be able to reduce waste and ensure consistency.

[clickToTweet tweet=”‘…if I supply quality material, they’ll come back again and again.’ – Chetan Waghchoure” quote=”‘If I supply quality material, they’ll come back again and again.’ – Chetan Waghchoure” theme=”style6″]

Manish Kochar: One of the most important ways we are able to offer higher quality control is in the way we manage our supply chain for automotive customers. There are three to four automotive hubs in India and for all 3 locations, we have dedicated POSCO-owned service centers. Before POSCO began collaborating with the local mills, there was no integrated logistics plan so mills in one part of India were supplying products on the other side of the country. Now, India is a big country so it was impossible for them to manage any type of dynamic, just-in-time delivery supply chain. Because of POSCO’s superior supply chain management, we have created a very big gap between us and our competitors.

Also, nobody works in as much detail as POSCO does. At POSCO, we develop specific steel solutions for each product based on how the part will be used and in what capacity. In addition, we have separate application codes defined in our system that prevent us from providing materials that are not specifically designed for that part. Most of our competitors cannot do that, they simply provide similar materials for each part.

For global companies that value quality, POSCO is always their first choice.

Q3. How has POSCO’s Solution Marketing helped customers improve production processes and manufacture better products?

Ajay Telrandhe: We recently worked with Tata Motors and Royal Enfield to develop new fuel tanks. Tata Motors’ previous fuel tanks had a short life cycle and were prone to rusting with leakages while Royal Enfield was using galvanized electroplated material for their fuel tanks that was very expensive and had to be imported as it was hard to procure in India. So, POSCO worked with both companies individually and came up with a GA product with a chrome pre-razing coating. By making these adjustments in the production process, both companies have seen much better results with reduced costs and inventories.

“We are currently the only supplier in India who can provide galvanized steel at 0.48cm.” – Manish Kochar, Sales

Manish Kochar: One successful example was the time we worked with one of our customers to reduce the thickness of their Extra Deep Drawing (EDD) galvanized steel product for Dish application. At that time everyone was using 0.6mm thick galvanized steel, but the customer wanted it reduced to around 0.5mm. We met with our Quality Assurance Department with the goal of reaching 0.48-0.50mm. After planning, development, and testing we found that in addition to the reduction in thickness there was around a 10-15% reduction in weight as well – with no loss in stability. We are currently the only supplier in India who can provide EDD galvanized steel at 0.48mm.

Q4. How does POSCO Maharashtra plan to continue its success into the future?

Chetan Waghchoure: The Indian auto market is not yet saturated and it is still growing.  We see constant growth in this segment and expect to see new investment opportunities with many of our global clients including electric carmaker Tesla, KIA Motors, BMW, and SAIC-China. Having developed strategic locations throughout India has given us an advantage and helped us have an upper hand in the competitive automotive steel market. We are prepared and expecting continued growth in the automotive steel market.

POSCO Maharashtra is confident in the quality of products they can provide to customers as India’s auto industry expands.

Ajay Telrandhe: As India’s economy continues to grow, all of the global players will also have a presence in India. Because of this, the demand for steel will continue to rise. At POSCO Maharashtra, we are preparing for this opportunity. We will continue to develop our galvanizing line in order to meet increased demand while continuing to focus on delivering the highest quality products to all of our customers.

Manish Kochar: The government of India announced its National Steel Policy in April 2017 that focuses on improving per capita steel consumption in India both in the short and long term. The demand for automotive & home appliances is increasing steadily every year. POSCO is already an established brand worldwide, and more and more global companies entering the Indian market want to work with POSCO. As such, we will continue to provide a very high standard of quality for our customers.

[clickToTweet tweet=” ‘The global companies coming to India want to work with POSCO.’ -Manish Kochar” quote=” ‘The global companies coming to India want to work with POSCO.’ -Manish Kochar” theme=”style6″]

We have developed good relationships with local mills and consistently delivered high-quality products to our customers. We don’t see any issue with an increase in production and we don’t expect any gaps in quality as demand for POSCO steel continues to increase.

This interview was conducted as POSCO Group University held its Global New Leader Program in Korea. The Global New Leader Program brings together management from POSCO Family subsidiaries from all around the world so they can collaborate, share ideas, and develop new skills. This is just one global leadership program that POSCO organizes for its global employees. Find out more about POSCO’s global operations in our interviews with POSCO TCS in Thailand and POSCO China.

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Auto Industry’s Challenge to Meet Consumer Demands

Mileage, design, and emissions. Which do you consider the most when purchasing a car? It is difficult to say that one is more important than the others, and fortunately, POSCO GIGA STEEL offers unique benefits for each one to meet the needs of today’s auto industry as it faces increasingly strict demands on safety and fuel efficiency.

More than ever, the industry is requiring that a vehicle goes longer distances with less fuel, which means the car must be lighter.  Also, technological advances have enabled cars with more power, requiring them to be safer. Consumers also want a car that represents their personality, demanding vehicles with more sophisticated and elegant designs.

Cars now need to drive smoothly, burn less fuel, and ensure safety, all while boasting an elegant design (Image courtesy of Mercedes-Benz AG).

While there are other conditions that need to be considered, it is paramount that cars meet the following three conditions in order to satisfy consumers: fuel efficiency, safety, and design. But these demands are becoming increasingly difficult to meet, and the only solution is to discover a technology that enables all of the above. For safety considerations, in the event of a collision, parts of the car also need to absorb the kinetic energy and protect the passengers inside.

In addition to having a battery and electric motor, the electric car is different from standard cars because the battery is a part of the frame itself.

6 Types of POSCO GIGA STEEL Tailored for Different Auto Parts

A car’s body frame requires different steel products for specific parts (Image courtesy of Renault)

POSCO GIGA STEEL is an advanced high-strength steel (AHSS) that can meet these various demands. Let’s take a look at the different types of POSCO GIGA STEEL products and how each one is being used in different parts of the car.

Complex Phase (CP) Steel

Complex Phase (CP) steel is often used to make reinforced auto parts that require high crashworthiness ratings, such as sill side panels, bumper rails, and door impact bars. It plays an extremely important role in the car frame as it is highly resistant to dents or bumps. In the past, the side panels of race cars were purposely made to be thicker in order to prevent dents and protect the driver inside and this naturally led to the vehicle becoming considerably heavier. However, CP steel minimizes these disadvantages. In the event of an impact, cars made with CP steel retain its original shape considerably better than other car frames due to its high strength and also has an exceptional ability to absorb all of the energy while still exhibiting an impressive thinness. It is often incorporated into the sill side panels and door impact bars to allow for a more spacious design.

Dual Phase (DP) Steel

Dual Phase (DP) steel can be easily welded and deformed and boasts a high level of total elongation (the rate at which the material is stretched without snapping). DP steel is commonly used in seat rails or other lower body reinforcements that run underneath the passenger seat. The tensile strength is at least 980MPa, but because it also exhibits impressive ductility, it can easily be used for random spare parts.

Transformation Induced Plasticity (TRIP) Steel

Transformation Induced Plasticity (TRIP) steel first made its way into the auto industry about six years ago. As the auto industry is beginning to value lightweight cars more and more, TRIP steel has received more attention. It is mainly used in the inner parts of the car body. This part of the car needs to absorb shock and impact and also be flexible enough to be fitted around the complex inner structure of the car. With TRIP steel’s outstanding combination of strength and ductility, it is one of the most commonly used high-strength automotive steels in the auto industry today.

Martensite Steel (MART)

Because Martensite steel is naturally high in strength, thinner sheets produced from roll forming (a metal forming process in which steel is continuously shaped or formed until it reaches a desired cross-section) still retain the same level of performance as conventional parts. Thinner parts also have the added benefit of reducing the weight.

Hot Press Forming (HPF) Steel

Hot Press Forming (HPF) steel is a different class of steel made with a unique steel production process. Typically, as steel becomes higher in strength, it is more difficult to mold into the desired shape through conventional processes. However, through the HPF process, the steel is heated to 950℃ before press forming. At high deformation temperatures, steel sheets are very soft so that difficult shapes can be obtained easily. During forming, the heated steel sheet cools down rapidly in the die block, so that the resulting pressed parts have a very high strength level. Due to its combination of high strength and formability, HPF steel is often used in the B-pillar of a car which requires intricately shaped parts as well as the A-pillar roof side rails which are prone to damage.

Post Heat Treatment (PHT) Steel

The chassis that supports the car frame needs to be extremely durable and resistant to impacts or shocks on the road as its main function is to improve the ride quality of the vehicle.
In order to increase the durability and torsional resistance, the material needs to be quenched and tempered. Before going through the heat treatment portion of the process (quenching), the material can be easily molded into spare parts due to its reduced strength. After being molded, it is heated up to 950°C and then rapidly cooled by water. This is why PHT is called “post-heat treatment steel”. Due to its ultra-high strength, it also has lightweighting benefits and is typically used in a vehicle’s chassis, stabilizer bars in a suspension system, and torsion beams.

These six types of POSCO GIGA STEEL each have their unique advantages in terms of processability & strength, production cost, and ease of application. Compared to conventional materials, thinner pieces can be used while still retaining the same level of performance and strength. Due to these incredible characteristics, POSCO GIGA STEEL is able to meet the increasingly stringent requirements of the auto industry for safety and efficiency.  

Image courtesy of Renault

Researchers in the auto industry are constantly looking for a stronger, more formable material. As the auto industry undergoes another paradigm shift, POSCO GIGA STEEL will continue to offer unique solutions that can satisfy both automakers and consumers.

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Since the early 20th century, car manufacturers have realized the importance of using specific steel for specific purposes. Henry Souther of the New York Times reported in 1909, “The secret of the use of steel is to put the right steel in the right place.” Until fairly recently, automotive steel mostly consisted of weaker mild steels that were affordable and easy to form into parts, but innovations in advanced high-strength steels (AHSS) have given automakers more options when designing vehicles.

Today’s automakers and parts manufacturers must consider several properties of the steel they are using: formability, crashworthiness, and durability. Each plays an important role in how the car is made and how the car performs over time and during impact. Below we take a look at these criteria and why each is important for manufacturers when designing a car and its parts.

Formability in Manufacturing

Formability is a key aspect to any automotive material. If a part cannot be made, it cannot be used. Typically, to make steel stronger, automakers had to make sacrifices in weight and formability, and if manufacturers needed a material with more ductility they were forced to give up strength.

The first generation of advanced high-strength steels (AHSS) increased strength while decreasing weight, giving automakers the opportunity to use thinner steel sheets. However, as the steel became stronger it lost formability, making it difficult to mold into parts.

POSCO GIGA STEEL is formable so that it can be shaped into complex parts.

Development of the second generation of AHSS focused on improving formability and elongation; however, its commercial use was limited due to its high cost and tendency to produce delayed cracking at room temperature.

With the new third-generation AHSS, like POSCO GIGA STEEL, steel producers have been able to bridge those gaps by producing steel that is formable, strong, and durable.  

While the average car built in 1975 utilized just 3.6% medium and high strength steels, by 2007 that percentage had increased by more than 230% in large part because the practical uses of AHSS have expanded.

Crashworthiness is Key for Safety

Crashworthiness is one of the most important elements to consider when designing automobiles because it is directly linked to the safety of passengers. The crashworthiness of a car is affected by many things including its structural build, safety devices, and materials.

While crash tests of full vehicles are often performed when developing a new car, crash tests of automotive parts are not carried out as often. To bridge this gap, POSCO developed its own crash test simulation for auto parts using high-speed compression and bending.

Crashworthiness criteria such as energy absorption & fracture, collapse mode, reaction force, and mean load is evaluated to provide reference data for car design. With these tests, POSCO is able to provide dynamic material data to its customers in order to propose the most appropriate steel solutions that maximize safety for passengers.

SsangYong Motor designed the new G4 Rexton SUV with a body frame that contains 63% POSCO GIGA STEEL. This is the highest ratio ever achieved in a body frame design and helps ensure significant levels of strength and safety for consumers. In the video below, watch as the SUV goes through various safety tests showing its crashworthiness and durability.

Durability to Prevent Fatigue Failure

The durability of parts is a critical factor to consider in vehicle design as their complicated components are subject to a wide array of complex stresses. In cars, material fatigue due to repeated mechanical loading can lead to the damage of critical components. Also, as vehicles are mobile machines, they are subject to even more unpredictable degrees of loading that can amplify the effects of fatigue on their parts. Moreover, because fatigue failure is often abrupt and difficult to detect, material providers must work to improve durability and ensure longer fatigue life.

“90% of the failures which occur in engineering components can be attributed to fatigue.”
– TR Gurney, Fatigue of Welded Structures

POSCO works with customers to provide accurate durability analysis for each of its products. Through extensive testing with various steel types, specimen shapes, and welding conditions, POSCO is able to provide in-depth testing results requested by customers.

POSCO also works with customers through its Solution Marketing 2.0 program that helps optimize the design and production process of each part – helping ensure that durability performance meets the customer’s needs.

POSCO GIGA STEEL provides automakers with durability to protect against fatigue failure.

Parts that require higher durability such as the CTBA (Coupled Torsion Beam Axle), wheel, engine cradle, lower control arm and stabilizer bar are interlinked with the fatigue data of POSCO steel. This provides the results of the durability analysis in order to suggest the most appropriate steel type for the manufacturer. Furthermore, POSCO supports joint research with customers for the design, manufacturing, and durability evaluations of its parts. POSCO also analyzes the causes of fatigue failure through SEM imaging of fatigue fracture surfaces, measurements of surface roughness, and measurements of strain rate and residual stress.

Today’s automakers must consider these properties during the design and manufacturing stages in order to find the right steel for each component. POSCO is committed to working with its automotive customers to ensure that the right steel solution is used for the right part – helping to find the right balance between formability, crashworthiness, and fatigue life.

In particular, through the recent zero-tariff measures taken among ASEAN Economic Community (AEC) member states and the Thai government’s push for more eco-friendly cars, the market is expected to see high growth potential with an expanded annual production capacity of 2.8 million by 2020.

POSCO TCS is positioned to take advantage of Thailand’s growing auto market.

Due to the growing auto market in Thailand, demand for automotive steel is also on the rise. Thai car makers all prefer to receive materials from local suppliers, so steel companies have begun building subsidiaries in the area.

POSCO TCS Opens in Thailand

In August of last year, POSCO TCS opened near Bangkok with a production capacity of 450,000 tons. With a local supply facility in Southeast Asia, POSCO can provide steel to automakers and parts manufacturers at more affordable rates and with higher quality control.

Chotika Arusawat (Procurement, left) explains the tax benefits for locally produced steel at POSCO TCS.

Chotika Arunsawat in the Procurement Department noted that “If automakers in the Southeast Asian region import POSCO steel from Korea they need to pay over 17% in taxes, but with POSCO TCS, they pay 0%. Also, the nearby Laem Chabang Port is one of the busiest container ports in the world making shipments to Malaysia, Vietnam, and Indonesia quick and simple.”

Having a local facility allows POSCO to build stronger strategic partnerships by smoothly supplying materials to global automakers and parts manufacturers in one of the largest car markets in the world. Narisara Im-Tua, who works in the Sales Department, told us that 85% of the steel products coming off the line were going to car makers and auto parts manufacturers, making POSCO TCS one of the largest steel suppliers in the region.

POSCO TCS is Defined by Superior Quality & Service

The plan to develop POSCO TCS began in 2011 with construction starting in 2014. When POSCO TCS went online in August 2016, other steel companies had already entered the market. However, POSCO is using its strategic advantages in production technologies, automotive steel expertise, and advanced production facilities to gain an upper hand.   

POSCO TCS President Lee Jin-soo says he is optimistic about the future of POSCO TCS in Thailand and the Southeast Asian.

In a recent interview, POSCO TCS President Lee Jin-soo noted that “POSCO is currently implementing systematic technology support with knowledge gleaned from other automotive steel facilities in Mexico, Indonesia, and China. Although other companies may have a head start, the future for POSCO TCS is looking bright due to our superior facilities and higher quality.”

To be a leader in the Southeast Asian region, POSCO TCS realizes it must manufacture superior products and offer better service than its competitors. Lee emphasized that POSCO TCS is “competing in the same industry to serve the same clients alongside some of the world’s best. Every employee at POSCO TCS must be devoted to securing a competitive advantage in all aspects of business.”

When asked how POSCO TCS can compete with other steel companies that have been in the region longer, Narisara Im-Tua stated matter-of-factly, “Because our quality is so high.” She added that POSCO TCS sends samples to Korea every 1-2 weeks for quality certificates and because of their consistently high-quality ratings, automotive customers are very happy.

Piyakun Boonmee (HR) explains POSCO’s commitment to quality for its customers.

Piyakun Boonmee in HR recounted the story of when a customer called Sales about a product that was not fitting in with their production process. The Sales Department reacted immediately, sending the Customer Service Department to the customer’s facility to check the product and production line. POSCO came back and worked to fine-tune the product so that it fit the customer’s specific production needs.

Boonmee stated that POSCO TCS customers “can contact our Customer Service Department at any time if there are any perceived quality issues. Our Quality Control Department will go directly to the customer’s factory to check the product and the production line. We work together with the customer to fine-tune the product until we are sure it meets the customer’s needs.”

A Culture of Trust & Leadership

We asked employees how POSCO TCS could maintain such high standards and quality for its products while also building strong relationships with its customers and employees. The most common response was about the healthy working environment.  

President Lee Jin-soo told us that “If you are respectful and considerate of everyone, employees are better able to work together and build a great product – regardless of cultural barriers or where they are from. For better performance, we empower them with training and the skills they need to succeed and we take care of any issues with respect.”  

Also, at POSCO TCS each employee is provided with 30-40 hours of training per year. These classes include everything from leadership and communications to learning Korean.

Everyone agreed that POSCO TCS was a great place to work, making it easier to work together for the customer.

When asked what it was like to work at POSCO TCS, Piyakun Boonmee said, “At POSCO TCS we are like a family and it is a happy place to work. Even though we work in separate teams, we are not separate, we work together for the customer – always striving to learn more and do better.”

Boonmee added, “In the future if we continue working like a family, we will be the #1 company in Thailand. After that, we’ll be number #1 in Southeast Asia. And we all share that goal.”

Throughout April & May, The Steel Wire will explore the uses and benefits of POSCO GIGA STEEL and what POSCO is doing to lead the industry with new automotive steel solutions.  Don’t miss any of the exciting stories from The Steel Wire – subscribe via email today.