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.

It’s a common theme, and the images that pop into mind may be of early humans during the Iron Age.

But according to Professor Seohyung Kim of Inha University, the history of iron precedes the history of life, and so historians need to look back to the beginning of the universe to fully understand the way iron has shaped humankind and its environment. She gave a special lecture called “History of Iron: Universe, Life and Human,” as part of the exhibition on October 13. Professor Kim studies history from a Big History perspective, or a multi-disciplinary approach to the study of the past that combines science, geology, human history and more to get a better, bigger picture of the past, present and future.

So here’s a look back, way back, into history to see what iron has to do with the history of man.

Stars Exploded and then Iron Existed

Where did iron come from? The stars. To be exact, large, dying stars. In the beginning of the universe, there were only 2 elements in existence- helium and hydrogen. New elements are only created when protons and neutrons fuse together and this requires a lot of heat.

The temperature of a star rises when it uses up all of its hydrogen atoms, and when it uses up all of its helium atoms, it collapses, emitting even more heat. This cycle repeats itself, creating new elements in the process until finally, iron in created. Elements with greater mass than iron are created in a supernova, or the death of a really, really big star.

A piece of meteoric iron formed by the heating and collapsing of a star sits on display at the National Museum of Korea.

So, why is this important?

The variety of elements created by exploding stars are what planets are made of, including earth, and iron makes up 35 percent of the earth’s entire mass.

Humans and their Complex Brains

After the formation of the earth, simple life forms appeared, and then eventually primates and homo sapiens. Humans are the most powerful species on earth, largely due to their complex brains that allowed for the development of language and through it, collective learning.

Iron-rich red meat was an important factor in human-brain development. (Source: Omicrono)

What’s interesting is that around 2.5 million years ago, humans started eating meat rich in iron and calories. Before this change in diet, early humans spent most of their scarce energy on chewing and digesting large amounts of vegetation. With the introduction of meat, their brains got larger as it is a muscle that requires 20 times more energy than muscles in other parts of the body. When humans started cooking meat with fire around 500,000 years ago, they consumed even greater amounts of meat, meaning humans could meet their dietary iron needs, and put their larger brains to use for things like agriculture.

Agriculture and Civilization

Collective learning led to some of the most critical developments is history, including agriculture, which developed after the end of the last ice age about 11,700 years ago, as human populations increased due to the fact that they were able to cook and consume meat. Further advancements in farming tools during the Iron Age led to an abundance of food and massive civilizations.

Some iron tools that made farming easier are on display at the National Museum of Korea.

Weapons Made Stronger with Iron

However, farming tools were not the only places where iron was applied. As communities developed around abundant agricultural centers, people decided they wanted more land, labor and power. So, cities waged war on one another with iron tools and armor that were fatally strong.

The Iron Age brought forth improvements in soldiers’ armor, and can be seen at the National Museum of Korea.

One vital invention in the evolution of weapons and tools alike was the wheel. The oldest artifact of the wheel is a potter’s wheel found in Mesopotamia and dates back to about 3500 BC. Then came the wooden wheel that were attached to chariots for effective warfare. Then finally, the Celtics applied iron rims on their chariots for added strength, durability and speed. Paired with iron swords and armor, wars became vastly efficient.

Iron wheels, like this one on display at the National Museum of Korea, enhanced existing wooden wheels.

After many years, the Chinese invented gunpowder triggering a new era of warfare. Iron was used to make rifles, cannons and other gunpowder machines to wipe out massive amounts of people at a time.

The invention of gunpowder led to new weapons such as these Iron rifles on display at the National Museum of Korea.

From Iron to Steel

After centuries of iron spearheading the development of new technologies and civilizations alike, a man named Henry Bessemer introduced a process to produce pure iron with a converter in 1856, known as the Bessemer Process. This invention would lead the way to the commercialization of steel and then eventually the industrial revolution near the end of the 18th century.

The steel industry was met with a rampant rise in steel demand during the second industrial revolution nearly a century later, with the introduction of electricity, gas and oil. Steel consumption continued to thrive into the third industrial revolution as it served the foundations for electronics, computers and automated production systems. As the world enters the fourth industrial revolution, steel will continue to be the bedrock of leading innovation and technology including electric vehicles, sustainable energy facilities and smart manufacturing factories.

Automated robots are part of what workplaces will look like in the fourth industrial revolution. (Source: Business Insider)

Looking back on history, the role and value of iron and steel in human development is indisputable. And to think, it all started with the death of a star.

Cover photo courtesy of BBC.

Carbon-based fossil fuels are finite resources that are gradually becoming too costly to extract, both in terms of environmental impact and financially. These resources will run out, or fall out of use as the cost of retrieval outweigh the reward.

Renewable, sustainable energy comes from resources that are replenished regularly — typically, the wind and the sun. Whether hydroelectric power, bioenergy, geothermal energy, or solar photovoltaic power, sustainable energy sources protect the environment and offer a future-proof way to power people’s lives.

Hydroelectricity is another form of renewable energy. (Source: USGBC)

Historically, renewable energy has been overlooked in favor of carbon-based energy, owing to the cost of installing new technology versus using what is already in existence. With costs decreasing, however, alongside a global urge to be more environmentally friendly and to implement more renewable and sustainable practices, things are set to change.

The global energy industry is shifting away from a reliance on carbon-intensive energy to sustainable, renewable energy. The steel industry is part of this shift. POSCO is one of the companies leading the way in achieving environmental well-being. It does so with environmentally responsible corporate practices, as well as by creating products that are eco-friendly and capable of changing energy production on a global scale.

Trends in the Global Energy Industry

The growing importance of sustainable energy is clear. According to the Renewable Energy Policy Network, in 2016, renewable energy capacity was enough to supply over 23 percent of global electricity, and worldwide new investment in renewable power and fuels climbed to a high of USD 285.9 billion in 2015.

With the focus on sustainability, the mix of energy sources being used is shifting, too. In the United States, while renewable energy and natural gas continue to grow, the consumption of coal is dropping.

As in many other industries and areas, technology is changing the face of the global energy industry. Artificial intelligence, big data, and other technological strides make energy production more efficient, optimizing practices and opening the door to more sustainability.

POSCO’s Energy and Environmental Strategy

As a major player in the steel industry, POSCO takes its role in promoting sustainability very seriously. Its energy and environmental strategy set out the company’s expectations and plans for ensuring eco-friendly practices on all fronts, guiding all activities to ensure it is acting in an environmentally-conscious manner.

POSCO’s environmental management policy makes sure that the company complies with all environmental regulations, and works to improve the environment in its processes. Clean production processes and optimized pollution prevention technology minimizes emissions. Efficient use of resources and byproducts also enhance efficiency.

POSCO uses clean energy and green technology wherever possible, leading the low-carbon green growth initiative. Its environmental management processes and performance are fully disclosed for transparency and sustainability.

As part of its strategy, POSCO is dedicated to creating eco-friendly products, with 20 eco-friendly steel products developed in 2016. Eco-friendly products accounted for almost half of all products developed that year.

Exploring POSCO’s Efforts

One of POSCO’s biggest environmental successes is PosMAC, or POSCO Magnesium Alloy Coating Product. PosMAC is an ultra-corrosion resistant alloyed steel plate, adding safety and efficiency to buildings and products constructed with this material.

How does PosMAC help the environment? This material is ideal for constructing solar panels, owing to its high resistance and affordability.

Solar panels made of PosMAC produce renewable energy

Solar photovoltaic units generally last about 30 years. The materials used within construction need to stand up to the elements for that long. The cost of the units, including materials, is about half of the total price of installing a solar energy system, making material pricing a key factor in the accessibility of solar.

Because PosMAC can resist weather and corrosion effects, and because it is affordable, it is well suited for use in solar units. PosMAC lowers the cost of installing solar energy, bringing it within reach of industry players and smaller consumers alike. 

This year, POSCO signed MOUs with four major manufacturers of photovoltaic structures in India including Ganges and Purshotam to supply a total of 49,000 tons of PosMAC. Company executives hope to increase that number to 60,000 tons by 2018.

This is just one example of an environmentally friendly application of PosMAC. There is plenty of potential for this material to be used in the wind, biomass/fuel, small hydro, geothermal and energy efficiency sectors too. Wherever environmentally sustainable, cost-effective and high-performance is in need, POSCO and its steel products such as PosMAC have a role.

Cover photo courtesy of the Huffington Post.

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Below we take a closer look at POSCO’s recent developments in lithium extraction and rechargeable battery production. Technological innovations have helped POSCO emerge as a leader in the industry as it seeks to make each step of the process more sustainable, more affordable, and less wasteful.

POSCO Innovates Lithium Extraction and Production

Over 94% of the global lithium supply comes from just three places: South America (44%), Australia (36%), and China (14%). This is because most lithium is found in naturally occurring brines at high altitudes and with little rainfall. Brines are underground reservoirs of dissolved salts containing elements such as lithium, potassium, and sodium.

To extract lithium from these brines, the salt water must be pumped to the surface into evaporation pools. Once on the surface, the brine is concentrated through solar evaporation techniques and then processed to remove impurities and separate the lithium – a process which can take anywhere from 12-18 months.

The Pozuelos Salt Lake in Argentina are one of the few places in the world where lithium can be extracted from brine.

Lithium can also be extracted from hard rock like spodumene. This process is much faster than extraction from brine; however, it is also much more expensive (up to double the cost) and requires a wide range of hydrometallurgical processes.

Realizing the potential growth of the lithium market, POSCO began to develop new extraction technologies in 2010. This new chemically-based lithium extraction technology is able to reduce extraction time while also improving efficiency and reliance on overseas imports. The first pilot program began in 2013, and in February of this year, POSCO became the world’s first corporation to commercialize chemically-based lithium extraction technology.

[clickToTweet tweet=”POSCO’s advancements in lithium extraction make it more sustainable and less time intensive.” quote=”POSCO’s advancements in lithium extraction make it more sustainable and less time intensive.” theme=”style6″]

While traditional lithium extraction takes anywhere from 12-18 months, POSCO’s new method shortens the time frame to anywhere from eight hours to one month while also offering a purity rate of 99.9% and increasing the lithium recovery rate to over 80%. Also, typical brine extraction by evaporation is a resource heavy process, and POSCO’s advancements help to make it a much more sustainable venture, using less water and resources.   

Finding Alternative Sources of Lithium

The electric car industry is expected to grow exponentially in the coming years. By 2040 it is expected that electric vehicles (EV) will have up to 47% penetration with consumers. EVs powered by rechargeable batteries will put an added burden on the already stretched lithium supply. Therefore, efforts to expand lithium sources are under way in order to meet the growing demand.

Today, brine and spodumene are most often used and there have been efforts to process lithium from clays. While that process has not yet been commercialized, last month Lithium Australia successfully extracted 94% to 99% lithium from clay deposits in Mexico.

POSCO CEO Kwon Ohjoon holds lithium on his visit to PosLX, POSCO’s new factory that is expected to produce enough lithium for 70 million laptop batteries.

Also, earlier this year POSCO opened its PosLX plant, which is expected to produce 2,500 tons of lithium carbonate per year. That amount is enough to manufacture about 70 million laptop batteries. What is unique about PosLX is that they are currently obtaining their lithium phosphate, a raw material of lithium carbonate, by extracting it from wasted rechargeable batteries. In extending the life cycle of these dead batteries, POSCO is helping to make an already sustainable energy source even more eco-friendly.

More Sustainable Battery Production

In addition to POSCO’s endeavors to find more sustainable ways to produce lithium, they are also becoming directly involved in battery production. In April of this year, POSCO CEO Kwon Ohjoon announced plans to build a smart factory that would be capable of producing anode materials for rechargeable batteries.

[clickToTweet tweet=”“We will build a smart factory to produce the world’s best anode materials and secure future competitiveness in the battery material business.” – Kwon Ohjoon, POSCO CEO” quote=”“We will build a smart factory to produce the world’s best anode materials and secure future competitiveness in the battery material business.” – Kwon Ohjoon, POSCO CEO” theme=”style6″]

POSCO Chemtech has already expanded its production capacity to 6,000 tons per year, but with the newly announced plant, it will have the capacity to produce 30,000 tons per year with over KRW 200 billion in sales. Also, since the beginning of this year, POSCO has been mass-producing PG-NCM (POSCO Gradient Nickel Cobalt Manganese), the high-capacity cathode material for low-speed electric vehicles.

From smartphones to cars, the future will be powered by lithium-ion batteries, and as more and more industries come to rely on these rechargeable batteries, advancements in lithium production are crucial in order to keep greener forms of energy available and affordable. With new developments in this area, POSCO is already leading in both lithium production and tech innovation, and well-positioned to be a global leader in more sustainable development.  

*Cover image courtesy of the World Steel Association

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Advancements in products, production methods, and new technologies have helped POSCO expand the expectations of what a sustainable steel company should be.  

In honor of Earth Day, The Steel Wire takes a look back at seven recent initiatives & breakthroughs from the last year that have helped POSCO become an industry leader in sustainable development.

POSCO GIGA STEEL: Lighter for EVs, Less Production Emissions

As the auto industry heads toward producing lighter, more fuel efficient vehicles, they need materials that are both strong and light. Car bodies manufactured with POSCO GIGA STEEL and other advanced high strength steels could see a 26% reduction in total weight. Also, based on its life cycle assessment measuring carbon dioxide emissions from production to recycling, POSCO GIGA STEEL performs remarkably well as an eco-friendly material. According to the World Steel Association, steel emits 2.0 to 2.5 kg of carbon emissions when producing 1 kg of material while aluminum emits 11 to 12.6 kg when producing the same amount.

See how POSCO GIGA STEEL offers an ideal material solution for automakers looking to make more lightweight and fuel efficient cars.

POSCO’s Smart Factory Introduces Artificial Intelligence

When POSCO introduced artificial intelligence into its smart factory operations in February, they were able to create higher quality products using a more sustainable production method. Coating weight control is a highly sophisticated process that keeps the coating layer consistent. Quality can deviate depending on the worker, but with POSCO’s new AI technology they can ensure quality control while reducing wasted zinc during production.

Read more about how POSCO is using AI and smart factory technology to make its operations more efficient and sustainable.

POSCO’s Advancements in Lithium Extraction Recharge the Battery Industry

Lithium extraction traditionally takes anywhere from 12-18 months using a slow evaporation technique. However, POSCO’s new extraction method, which came online in February of this year, takes from 8 hours up to one month while also offering a purity rate of 99.9% and increasing the lithium recovery rate to over 80%, which reduces the resources needed for extraction making the process more sustainable and eco-friendly. Also, in a first for the industry, POSCO developed a way to extract lithium from recycled batteries. Both of these innovations have helped create more eco-friendly processes for an industry that is expected to grow exponentially in coming years.

Find out more about POSCO’s developments in lithium extraction and its efforts to reshape the industry.

POSCO Expands Production of its Non-Oriented Silicon Steel for Electric Vehicle Drive Motors

Top-grade non-oriented silicon steel is a core ingredient in high-efficiency premium consumer electronics and electric vehicles. It is an environmentally-friendly material that saves energy and reduces CO2 emissions. With the completion of its non-oriented silicon steel (Hyper NO) facility on February 20, production has increased from 80,000 to 160,000 tons, which is enough to supply parts for approximately 2.6 million electric vehicle drive motors.

Read more about POSCO’s efforts secure its position as a leading supplier to the growing electric vehicle market.

POSCO Humans Selected as Innovation Leader for Sustainable Solar Power Development

POSCO Humans received excellent evaluations last January for its steel structures that were built for solar facility installations. In particular, POSCO Humans received high marks for its structure that are used exclusively for floating solar power generation facilities and exclusive bolts that utilize PosMAC. It is a bolt-assembled structure that eliminates the need for hole machining and special tools.

Discover how POSCO developed floating solar panels using PosMAC.

POSCO’s World Premium Stainless Steel Shows No Corrosion After 18 Years at Incheon Airport

The first passenger terminal at Incheon International Airport was built in 2001 using POSCO’s 446M steel, and after 18 years, few signs of corrosion have been seen. 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. 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.

Find out how POSCO’s stainless steel products offer decorative and durable interior and exterior options in buildings.

PosMAC Shines at Renewable Energy India

PosMAC was recognized at the Renewable Energy India expo for its unique properties that make it uniquely suited for solar energy development. PosMAC is not just lightweight, it is also non-corrosive and durable enough to last 20-30 years.

Find out more about PosMAC at the Renewable Energy India expo, or find out more about PosMAC.

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.   Subscribe to our newsletter today.