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.

Both companies hope to further “strengthen technical and business cooperation domestically and abroad to apply Smart Factory platforms.”

From the left, POSCO CEO Ohjoon Kwon, President of POSCO ICT, Doo-hwan Choi, Matthias L. Heilmann BHGE CDO, Wouter Van Wersch GE APAC CEO.

Therefore, POSCO and GE combined PosFrame, POSCO’s Smart Factory platform, and APM (Asset Performance Management)*, GE’s representative Smart Factory solution, to develop and commercialize PosFrame+, a hybrid Smart Factory platform optimized for steel facilities.

POSCO’s PosFrame is specialized for the steel industry, capable of collecting all information from the production process for analysis and visualization. GE’s APM can increase the operation speed and stability with early warnings and failure predictions based on collected data.

POSCO and GE will apply GE’s APM solution to POSCO’s power generator No. 5 at Pohang Steelworks to test APM’s compatibility with the existing PosFrame, and to develop modules and verify the system’s adaptability. Once the companies finish developing the hybrid platform, PosFrame+, which predicts failures in steel facilities by combining PosFrame and APM, it will be a groundbreaking turning point for smart factory platforms.

During the signing ceremony, CEO Kwon said, “The development of smart technology for steel facilities will give momentum to the commercialization of smart solutions in the global market.”

Chief Digital Officer of BHGE, Matthias L. Heilmann stated, “Both companies will create opportunities in all areas by sharing visions and cooperating closely for the acceleration of digital transition of the steel industry.”  

Both companies plan to develop PosFrame+ for steel facilities and related industries, and will also create cooperative models for the global commercialization of PosFrame+ by sharing research cases and primary technologies for smart factories.\

※GE APM

All information collected from the production process can be analyzed automatically to increase the operation rate and stability. Facilities with APM will be equipped with early warnings through malfunction predictions and will be able to minimize maintenance costs and failure risks. A classic example of a successful application case is the “Lazarus project” which revived a combined power plant in Chivasso, Italy. Its operations stopped in 2013 due to the facility’s inefficiency, but after applying APM, the facility was able to revive its efficiency and the restarted operations after two years.

They also have every incentive to do so. From 2010 to 2016, the price of wind and solar energy dropped by 60 and 80 percent, respectively. With the global demand for energy projected to rise 30 percent by 2040, green energy producers and related manufacturers will see an increase in business activity, including the steel industry. Steel is used to produce every single type of renewable energy, and demand for high-quality steel is looking to increase.

Take a look at some of the first movers transitioning to renewable energy and the biggest drivers of renewable energy demand in the global market.  

SEE ALSO: Building a Green Energy Future with Steel

Google, the biggest corporate consumer of renewable energy

At the end of 2017, Google purchased 3 gigawatts of renewable energy, enough to power all of its 15 data centers and offices around the world for an entire year. Google started purchasing wind power from a farm in Iowa back in 2010. Today, Google purchases most of its renewable energy from wind and solar energy farms in South Dakota, Oklahoma and Iowa.

Inside Google’s colorful and green data centers. (Source: Business Insider)

What’s significant about Google’s renewable energy consumption is that even if it does not use up all of the energy for its own operations, the company sells it back into the market in regions where they operate. Then, they retire their Renewable Energy Certificates (RECs), meaning it is no longer re-usable or re-issuable. In doing so, it removes energy supplies from the market and forces producers to keep generating new renewable energy supplies, instead of trading existing RECs. Google is fully backing the renewable energy industry, creating more business for generators and materials suppliers such as steel.

SEE ALSO: India: A Rising Sun in the Global Renewable Energy Industry

With the rapid growth of internet-based services, data centers are also increasing, engulfing extensive amounts of energy. Data centers already account for 3 percent of the world’s entire electricity consumption, and 2 percent of total greenhouse gas emissions, equivalent to that of the airline industry. It’s a relief that companies like Google, with a growing reliance on data centers, are finding sustainable ways to fuel their business, and other companies are following suit.

Apple’s green data centers

Apple is another company that is making bold strides toward renewable energy. The company stated all of its data centers run on 100 percent renewable energy and its operations over 23 different countries run on 93 percent renewable energy.

Apple’s data centers run on 100 percent renewable energy. (Source: Digital Trends)

Apple joined RE100 in 2016, but the company is no newcomer to green energy. In 2015, Apple issued USD 1.5 billion in green bonds to finance eco-friendly business endeavors. Then in 2017, Apple issued another USD 1 billion in green bonds in response to U.S. President Donald Trump’s withdrawal from the Paris climate agreement.

In 2017, President Trump shocked the world by withdrawing the U.S. from the Paris climate agreement. (Source: Fortune)

Because Apple’s business also includes manufacturers who do not follow the same sustainable practices, Apple’s next challenge is to filter through their suppliers and select those that are committed to powering their operations with renewable energy. So far, 8 major suppliers have come on board.

Microsoft and Facebook are on their way

Microsoft’s global operations have been fully powered by renewable energy since 2014. This includes manufacturing, licensing and logistics. All of its data centers are 100 percent carbon neutral, but Microsoft is planning a slow but sure transition towards renewable energy. As of now, about 44 percent of the electricity that powers Microsoft data centers come from wind, solar and hydropower, and their first target is to reach 50 percent by the end of this year. They have also stated they will strive for 60 percent in the next 10 years.

Microsoft is building new data centers all over the world, including the UK (pictured), and plans to run them on green energy. (Source: WindowsAble)

Just like Microsoft, Facebook looks to power 50 percent of all its data centers with renewable energy by the end of this year after successfully reaching its 25 percent target back in 2015. Facebook has a large presence all over the globe, and already, their data centers inLuleå, Sweden, Altoona, Iowa, Fort Worth, Texas and their Menlo Park headquarters are running on 100 percent green energy. Moreover, Facebook plans to power their newest data centers to be built in Ireland, Denmark, New Mexico, Nebraska, Ohio and Virginia with renewable energy.

Facebook’s newest data center in Virginia will run on 100 percent renewable energy. (Source: Adweek)

The largest and most influential corporations in the world that operate the ever-growing, energy-extensive data centers are making the switch to green energy. Their changing business practices will further boost the renewable energy industry, create new jobs and open new business opportunities for the steel industry. As steel plays a vital role in supplying parts for renewable energy infrastructure, high-quality steel solutions will be in increasingly high demand.  

Cover photo courtesy of Rambus.

The ever-growing demand for electric motors can be attributed to several factors including the growing interest in eco-friendly and fuel-efficient motors and improved living standards in a number of densely-populated countries around the world. Plus, new innovations in home appliances are not only driving the demand for electric motors, it’s changing the way they are shaped, sized and put together.

So, how exactly do electric motors work?

An electric motor is in pretty much every electronic appliance. The motor is what turns electricity into mechanical movement. When an electric motor is charged with electricity, the axle, or metal rod turns and creates movement. The motor itself is powered by two opposing magnets – the permanent magnet and the electromagnet. When electric current is applied to the electromagnet, it pushes against the permanent magnet creating rotary or linear movement.

The inside of an electric motor. (Source: Stiavelli)

Many parts of electric motors are made of electrical steel, including the motor core. Electrical steel is an alloy of iron and silicon and can generate various magnetic properties. High-quality electric steel such as POSCO’s Hyper NO will have a small hysteresis curve that minimizes energy loss. POSCO’s technology also reduces core loss by 5 percent as well as motor noise by 5dB.

Electric Motors in Home Appliances

Home appliances currently account for about a third of total energy consumption and attribute to 45 percent of greenhouse gas emissions in an average household. Energy-efficient home appliances are in high demand due to increasingly stricter environmental regulations, consumers’ desire to save on utility bills as well as their desire to lower noise output from appliances such as dishwashers and dryers.

In order to maximize energy efficiency, engineers and manufacturers turn to high quality non-oriented electrical steel such as POSCO’s Hyper NO to meet consumer needs.

SEE ALSO: Why Electrical Steel Can Make All The Difference In EV Motors

Next Generation of Home Appliances

Aside from traditional home appliances, there is a growing number of innovative, next-generation home appliances that rely on high-quality electric motors for maximum efficiency, cost effectiveness and also range of movement.

These days, robots are part of the average household in the form of vacuums, personal home assistants, alarm clocks and more. Unlike traditional home appliances such as refrigerators and washing machines that are stationary, innovative robot appliances move in different directions. This is where actuators come in. Actuators are electric motors in a gearbox, and the gearbox essentially gives electric motors added torque, or rotational force, that allows the robot to move in a variety of directions, including twisting and turning.

Actuators are what propels a variety of movement in robots. (Source: Motion Control Tips)

Moreover, engineers are now working with modular actuators to build robotic structures for a greater range of movement, speed and positions through segmented parts. Highly efficient, relatively low-cost and diverse actuators are coming together with AI sensors, voice recognition and smart controllers to breed a new generations of home appliances.

There are 3 different types of actuators based on how they are powered, and electrical actuators are most commonly found in home applications. Compared to the other types of actuators, electric actuators have lower speed and power, but are easy to install and control. Because they are often modular and can be applied for customized purposes, the resulting robots have a great range of motion to fit the new roles home robots are taking on.

Examples of Applications in the home

Here are some of the latest robots for the home that require advanced electric actuators and are changing the way people think of home appliances.

Aeolus Bot

The prototype for the Aeolus Bot was introduced at this year’s Consumer Electronics Show (CES) in Las Vegas. The robot can move around the nooks and crannies of the home learning different objects and places with its smart software. It can also retrieve different objects and clean the house using other home appliances.

The Aeolus Bot responds to voice commands. (Source: Unbox Holics)

Not only that, Aeolus also has Amazon’s Alexa software, recognize its owner’s face and can alert family members of any disturbances.

Sony Aibo

Sony’s Aibo looks and moves like a dog. With its voice recognition software it can respond to commands, recognize faces and perform tricks. Although the furless bot may not be able to swim or jump the fence, it can pick up a objects, sit, roll over and move much more dynamically than other home robots.

The Sony Aibo can do simple tricks on command. (Source: The Verge)

The changing face (and shape) of home appliances is putting actuators to full use with their wide range of movement, speed and positions. Highly-efficient electric motors and actuators will continue to be in high demand as new innovations in home appliances and robots keep rolling out.

Cover photo courtesy of GE Reports.

Moody’s forecasted that POSCO’s financial status will improve in the next 1-2 years as a result of increased profits from the sales of POSCO’s high-value-added products and decreased borrowings due to the improvement of global market conditions. In particular, the ratings agency predicted that POSCO’s EBITDA (earnings before interest, taxes, depreciation, and amortization) will increase by 20-25 percent over the previous year, and its debt to EBITDA ratio will decline from 4.1 times to 2.8 times in the next 12-18 months.

Moody’s added that its affiliate, POSCO E&C, will also see its profitability improve in the future.

POSCO has reinforced the competitiveness of its steel business and improved its financial health and profitability since the inauguration of POSCO CEO Ohjoon Kwon in 2014, despite an unfavorable external environment marked by the global oversupply of steel and reinforced protectionism around the world.

POSCO has also been attaining its restructuring goal (149 cases) since 2014, and completed 146 cases of restructuring as of Q317, and should the company complete its restructuring by the end of this year, the number of POSCO’s domestic affiliates will be cut down to 38.

Its financial strength has also improved. POSCO’s consolidated debt ratio of Q3 dropped down by 1.5%p QoQ to 68.1%, the lowest ever since 2010, and its separate debt ratio was 16.3 percent, the lowest ever in its history.

POSCO increased its consolidated and separate sales projections by KRW 4.7 trillion and KRW 3.2 trillion, respectively, to KRW 59.5 trillion and KRW 28.8 trillion compared to its plans at the beginning of the year.

POSCO predicts that steel demand will continue to increase based on the restructuring of the Chinese steel industry, along with the anticipated robust growth of demand in emerging and developing countries. It plans to make continued efforts to generate revenues by securing financial strength, reducing costs and increasing the sales of high-value-added products.

Cover photo courtesy of CBS News.

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More than 290 people attended the presentation ceremony, including Ohjoon Kwon, chairman of the POSCO TJ Park Foundation; Chang-hee Kang, former chairman of the National Assembly; Hong-goo Lee and Deok-soo Han, former prime ministers of Korea; Gong-il Sa, chairman of the Institute for Global Economics; Nak-in Sung, president of Seoul National University; and prize winners from previous years.

Ohjoon Kwon, POSCO CEO and chairman of the POSCO TJ Park Foundation, said, “For the past 10 years, the POSCO TJ Park Prize has been a way to recognize those who tackle the never-ending challenges of today’s world. In the next 10 years, we aim to make the POSCO TJ Park Prize an even more noteworthy honor.”

This year, the POSCO TJ Park Prize was awarded to the following honorees:

• Excellence in Science: Prof. Jong-heun Lee, Department of Materials Science and Engineering at Korea University
• Excellence in Education: Attached Middle School at Kyungpook National University
• Excellence in Community Development & Philanthropy: Jimmy Pham of Vietnam, CEO of KOTO
• Excellence in Technology: Myeong-hwan Kim, head of the Battery Research Institute at LG Chem.

POSCO CEO Ohjoon Kwon (far right) stands with recipients of the POSCO TJ Park Prize. The award recognized their noteworthy achievements in science, education, community development, and technology.

The Excellence in Technology award was added this year to highlight how technology has contributed to the renewal of the Korean economy. Eligible candidates for this category include persons or organizations that contributed to national and global market development.

Prof. Jong-heun Lee of Korea University, winner of the TJ Park Science prize, was honored for his work on the oxide nano hierarchical structure in which nano building blocks are regularly self-assembled, and the p-type oxide semiconductor, which has a high level of catalytic activity that allows for gases to be detected quickly and selectively. His achievements are expected to be widely utilized in various areas such as safety, environment, medical science, and IoT.

Kyungpook National University Attached Middle School, winner of the Excellence in Education prize, was awarded for its model of creative public education. Unlike a typical learning environment, the middle school introduced project-based learning in 2012, which allowed students to switch roles with teachers and also collaborate with one another on a deeper level.

Jimmy Pham, winner of the Excellence in Community Development and Philanthropy prize, established KOTO (Know One, Teach One), the first social enterprise in Vietnam. For 17 years, the organization has been giving at-risk youth a chance to stand on their own by teaching various life-skill classes.

Myung-hwan Kim, head of the Battery Research Institute at LG Chem, received the foundation’s very first Excellence in Technology prize. Kim began to oversee battery R&D in 1996 when the secondary battery business was first starting to become active. Through much trial and error and over 20 years of experience in the field, Kim successfully developed the first lithium-ion battery for electric vehicles. He is considered to have greatly contributed to making Korea a leader in the secondary battery industry.

Chang-hee Kang, former chairman of the National Assembly, delivered a congratulatory address, saying, “I would like to thank POSCO for contributing not only to the development of science and technology, but also for actively recognizing scholars and citizens who made a great impact in their respective fields.”

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To combat these issues, each country is expanding into the global market with differentiated export strategies in order to increase their shares. China is diversifying export items and destinations for its bulk supply of steel products. Japan & Korea are moving forward with investment in high-quality steel production, and Korea is also gearing up to meet demand through overseas downstream investments in Southeast Asia, Mexico, USA, and India. In addition, in order to stay competitive, companies are adapting to the technological changes of the Fourth Industrial Revolution – integrating AI, IoT, and smart factory solutions to create stronger products.

Following the rise of China, the global steel trade market entered a period of structural transition in the 2000s. China used to be a net importer of steel and a “key market” for global steelmakers, but they have now become its leading producer. (Data courtesy of World Steel Association)

Below we outline some of the problems facing the Northeast Asian region and what they are doing to overcome them and remain competitive among these changing conditions of the last two decades.

Capacity of  the Chinese Steel Market

Roughly half of all steel production takes place in China. China’s rapid economic growth created conditions that led to the increased development of its steel industry, many of which were led through policy-driven investments by the Chinese government. From 1990 to 2016, the Chinese government introduced more than 320 policies and measures to regulate the steel industry. Of these, nearly half (49%) were issued to control the capacity of steel expansion. Despite recent capacity-related policies being introduced by the State Council, some industry observers doubt the potential of their effectiveness, which calls for a 100-150 Mt capacity reduction by 2020.

Edwin Basson, Director General of World Steel Association, believes that China reached peak steel at a rather earlier stage of its economic development compared with the experiences of other developed economies as it has accomplished a very condensed development in a relatively short time period. China is now seeing decreased demand for steel despite maintaining a high 6% GDP growth rate. Basson noted, “the largest and most difficult [challenge facing China] is probably the rebalancing between investment and consumption in the economy.” Because steel is so intricately integrated with all other parts of the economy, structural changes are forcing the steel industry to change as well. What has been a predominantly investment-led system is now shifting to a demand-led system.

Frank Zhong, from the Beijing office of the World Steel Association, recommended six directions for the Chinese government to take in its restructuring of the domestic steel market (download PDF).

• The government’s role should be gradually overtaken by market forces.
• The steel industry should be consolidated to generate better synergy in the industry, in particular in market development and R&D.
• A joint fund should be initiated to support the restructuring.
• Reform of state-owned steel enterprises (SOE’s) should be accelerated, the sooner the better.
• Steel companies should be more integrated into the global steel industry.
• Steel companies’ human resources system should be more open.

Because China seems to have already reached peak capacity, we should expect to see long term decline. While some markets have been able to recover to peak periods after the decline (see Germany and Japan), it is difficult to see how China recovers to its 2013 peak levels. However, the future development of Western China, the continued capability of China as a competitive manufacturing base, and its geographical location could contribute to renewed growth in steel demand.

Solutions to Overcapacity

Reducing excess capacity is not an easy task, largely because of the many hidden barriers. Capacity reduction can have a significant impact on the balance sheets of operating companies and are never popular with investors. With the determination of the current government to tackle overcapacity and environmental protection, China has publically announced a reduction of up to 150 million tons over a five year period.

World Steel Association members have urged that restructuring takes place based on fair and similar principles across all markets. Member groups recently agreed to the following principles:

• Governments should promote a swift and timely restructuring of the steel industry by advancing policies that ensure market forces play a decisive role in determining the future of the industry.
• Market-oriented approaches should ensure the survival of the fittest producers. Inefficient producers should not be subsidized to remain in operation.
• Barriers that delay restructuring should be removed in an orderly and timely way.
• Develop safety net support that mitigates the consequences of restructuring.
• Commitments to adjust the steel industry structure should be made known and tracked until finalization.

Because China represents such a large portion of the global market, any increase or reduction in capacity will have major implications for other countries. Finding a solution to China’s overcapacity is critical to the sustainability of the industry in the region and other nations have been pushing for decreased capacity.

Japan has been pushing for lower production volume out of China – especially as demand has peaked. In Korea’s case, China’s production capacity has forced steel manufacturers into business and financial restructuring due to slowed growth. In order to set themselves apart, companies like POSCO have refined their product line-up to offer more advanced, customized solutions that cannot be provided by high volume producing competitors.

Despite pledges to cut steel capacity, recent reports from the Financial Times suggested that China’s capacity actually rose in 2016.

The global steel export market is riding a wave of change in the face of surprisingly high growth in the Chinese steel industry. Japan used to be the world’s top steel exporting country, but it was overtaken by China in 2006. (Data courtesy of World Steel Association)

Aging Populations and Decreased Demand for Steel

Changes in working-age populations are directly related to steel demand because they are the main consumer group of homes and vehicles – two of the key industries that control steel demand. Therefore, the aging of working-age populations will continue to have a negative impact on economic growth and steel consumption in Japan, Korea, and China.

Learning lessons from advanced countries about the experience of aging populations, below are some shared characteristics:

• Decreases in manufacturing coincide with increases in service.  
• After reaching peak production, steel consumption typically declines.
• Changes in working-age populations have a strong correlation with changes in steel-consuming industries and steel consumption.

The decrease in working-age populations in Korea, China, and Japan, which have led the growth of the global steel industry, are expected to have a negative impact on global steel demand in the medium to long term. While demand is expected to increase in the ASEAN region and in India, it is unlikely that they will grow fast enough to offset the decline in steel demand in the three East Asian countries.

To confront this structural shift, steelmakers must begin to improve upon their already advanced products. Aging populations have less total demand, so competition from the steel manufacturers will likely come through the technological advancement and customized solutions being seen in the Fourth Industrial Revolution.

Influence of the Fourth Industrial Revolution on the Steel Industry

As Northeast Asia faces many structural changes that are having a depressive impact on the steel industry, they are taking the necessary steps to stay ahead. The region has long been a leader in technological adaptation and product innovation. Recent efforts to produce higher-value, customized steel have also coincided with improvements in the production processes.

POSCO’s Smart Factory houses rolling mills with IoT sensors attached, which collect data for analysis.

The industry is already extremely efficient in iron and steel making, as well as processing. Within this environment, the Fourth Industrial Revolution could continue to play an important role. It is unclear how much progress will be made as the industry has already achieved a relatively high level of technological advancement. Companies like POSCO are introducing technology to create smart factories that streamline production, reduce waste, and increase safety.

In China, their “Made in China 2025” and “Internet Plus” initiatives plan to integrate mobile, cloud computing, big data and the IoT with manufacturing – all in order to help develop e-commerce, industry networks and the international presence of Chinese companies. In Japan, their “New Robot Strategy” is being developed to position Japan as a robotics superpower in order to create streamlined and automated systems.

POSCO is working to build steel plants that can sense, analyze, and control its conditions, just as a human can feel, think, and respond. POSCO’s smart factory project, currently taking place at Gwangyang plate plant, will gradually be extended to all production areas.

In addition, apart from making advancements in the actual production of steel, it is expected that the industry will have a stronger indirect influence through changing the manufacturing process and product design of items requiring steel as an input.

With its Smart Factory, POSCO is able to identify any defects during the production process prior to the final stages of the operation.

Economic, demographic, and structural shifts are having long term effects on the steel industry in the Northeast Asian region. As the largest global producer, China’s steel production capacity and efforts to curb its oversupply affect not only investors in China but also steel makers in every other region around the world. Also, due to a slowing economy and aging population, regional demand is expected to experience an extended decline in the coming years.

To offset these negative impacts, technological advances continue to define the industry as companies like POSCO introduce AI into their smart factory systems. These advancements have led to improvements in quality, reduction in waste, and increased safety for workers. As the Fourth Industrial Revolution expands, steel companies must adapt in order to face the pressures facing the industry as a whole.    

Building exteriors and roofs are the most visible parts of buildings, while also being the most vulnerable to corrosion. Materials used in their construction should be both corrosion-resistant and aesthetically pleasing, which is why stainless steel has become a popular option for materials in a building’s exteriors.

POSCO recently signed a deal to supply 380 tons of its 446M stainless steel for the expansion of the Incheon International Airport Passenger Terminal, and 120 tons of its 329LD stainless steel for the construction of the Kwandong Hockey Centre .

A bird’s-eye view of the second passenger terminal at Incheon International Airport. Because of its non-corrosive properties and stylish appearance, POSCO’s 446M steel will be used as an exterior material.

Incheon International Airport, the #1 in airport service quality for the last 10 years, is moving forward with construction to build its second passenger terminal to accommodate for an increase in passengers. The first passenger terminal was built in 2001 using POSCO’s 446M steel, and after 18 years, few signs of corrosion have been seen. Therefore, when planning for the second terminal, they decided to use the same type of steel along with the application of the Bead Blast process that will create a rough texture on the roof to lower the reflectivity rate for aircraft pilots during take-offs and landings.

POSCO’s 446M steel contains high amounts of chromium (26%) and molybdenum (2%) that give it superior corrosion resistance for use in exterior construction near coastal areas, like Incheon. In addition, the minimization of carbon and nitrogen make the steel easier to weld and process. Because of its low thermal expansion coefficient (the ratio of the thermal expansion of an object to temperature under a constant pressure), it is possible to make longer panels, especially when compared to materials such as aluminum or the 300 series stainless steel.

POSCO’s 329LD steel was applied to the exterior of the recently-built Kwandong Hockey Centre in Gangneung, Korea.

POSCO’s Lean Duplex 329LD steel was applied to the exterior of the Kwandong Hockey Centre , which will host events and athletes from all over the world in February 2018. The stadium is located only 7km away from the coast and it was required that the steel have at least 316L-grade corrosion resistance. Because of budget overrun concerns, POSCO recommended its Lean Duplex 329LD steel. Its corrosion resistance is above that of the required 316L steel, and because of its high strength, thinner applications of the steel could be used in the final design. In addition, vibration surface treatment was applied in order to add texture to the surface of the exterior, giving the building a more modern touch.

POSCO is also working to expand the sales of its stainless steel products in the global market. POSCO recently signed an agreement with a multipurpose apartment complex in Vancouver, Canada, and more are expected soon. Because of its corrosion resistance, beautiful aesthetics, high strength, ease of maintenance, and fire resistance, the popularity of stainless steel is expected to continue rising with architects, engineers, and the general public.

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However, like any other material, it has its limits. Corrosion is a common issue that affects iron’s durability, and environmental factors such as salt and pollution can cause further harm to the metal’s overall state.

To combat this, POSCO has created a specialized galvanized steel called PosMAC (POSCO Magnesium Alloy Coating Product), which is guaranteed to last five to ten times longer than standard steel due to its newly formulated composition.

PosMAC’s Unique Qualities

Galvanized steel has a special coating created from zinc that protects it from rust over time due to contaminants in the air. Yet, it still remains susceptible to corrosion — the primary zinc layer can easily be broken down, and potentially create more damage to the iron.

PosMAC, however, has an outer layer made from a combination of zinc, aluminum and magnesium that allows it to outlast galvanized steel’s zinc-only layer.

This mixture creates a protective film layer called simonkolleite when PosMAC’s coating is exposed. Simonkolleite is a stable compound that forms from the presence of magnesium, which then turns into an extra barrier of protection on top of its external layer.

PosMAC’s special coating also has a greater hardness than that of other steels, which reduces contamination during processing and minimizes the incurrence of scratches.

But the most remarkable aspect of simonkolleite is how it “heals” exposed parts of steel. Usually, when a surface is exposed, rust forms. However, with PosMAC, the simonkolleite layer gradually coats the vulnerable portion to prevent it from further corroding.

The Uses of Specialized Steel

Why is a highly corrosion-resistant steel like PosMAC considered so important? Because of its ability to withstand rust, it is considered a versatile material for painting, welding, construction processes and even raising livestock – all processes that require a lasting and high-strength metal to support prolonged usage.

It is ideal for manufacturing electronics and for automotive uses, and since it can survive high temperatures and environments with high moisture levels, it can be utilized in structures such as marine farms and subways.

Affordably Effective

PosMAC is considered cost-effective because of its high durability – with less corrosion, less is spent on maintenance and replacement fees. It also does not require a post-coating process like unplated steel, which also shaves costs.

Solar panels have become an important area where the use of specialized steel, such as PosMAC, is necessary. These renewable energy sources require stable structures that can last beyond 20 to 30 years, and as a result, are expensive to build. PosMAC ensures longevity, which saves money in the long run.

A New Rendition of POSCO Steel

PosMAC is one of the many examples that showcase POSCO’s status as a company creating premium and innovative products for the global market. The company has been named as the “World’s Most Competitive Steel Company” for 7 consecutive years, and continues to supply the world with high-quality steel to run a wide span of industries.

Thanks to PosMAC, POSCO’s reliable and corrosion-resistant steel solution, the standard face of steel has been revolutionized for the overall betterment of infrastructure and commerce.

PosMAC Shines at Renewable Energy India 2016, Asia’s Largest Energy Trade Expo

PosMAC: The Revolutionary Steel

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The MOU-signing ceremony was held on October 17 in the POSCO magnesium plate factory in the Haeryong Industrial Complex in Suncheon. Approximately 20 people were present, including National Assembly member Jeonghyeon Lee, the governor of Jeolla-namdo Nakyeon Lee, the mayor of Suncheon Choonghoon Cho and POSCO CEO Ohjoon Kwon.

POSCO and Suncheon, Jeolla-namdo entered into an MOU on October 17 to expand the number of magnesium production facilities. Third from the left, National Assembly member Jeonghyeon Lee, governor of Jeolla-namdo Nakyeon Lee, POSCO CEO Ohjoon Kwon and the mayor of Suncheon Choonghoon Cho.

According to this MOU, POSCO and Suncheon will join forces in the purchase of a lot and the expansion of the facilities for producing automotive wide magnesium plates. They will also work side by side in transforming the Haeryong Industrial Complex into a light materials industry cluster by fostering and actively supporting magnesium-related SMEs.

Magnesium is in the spotlight as an ultra-light material that is lighter than aluminum and steel. As environment-friendly issues have emerged in the automotive industry, POSCO has focused on developments with magnesium, as it can be more effective than aluminum in terms of weight reduction. POSCO completed the magnesium plate factory in Suncheon in July 2007, and has since been producing and supplying alloy plates to domestic and overseas automakers and electronics companies.

POSCO’s magnesium was applied to Renault’s concept car ‘EOLAB,’ which was unveiled at the Paris Motor Show in October 2014. The roof of a standard car weights about 10kg, but the roof of ‘EOLAB’, which is made from POSCO’s magnesium plates, weighs about 4.5kg, and has accordingly attracted public attention.

POSCO is planning to capitalize on this expansion to preempt the anticipated increasing demand for magnesium for foreign automobiles, and become the first to make a move in the global market.

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