What is domination? No other example than that of steel befits this question.
As the world embraces technological advances, steel continues to be the dominant sector with its strong hold on developed and developing countries alike. In fact 98% of iron ore mined worldwide is used to make steel. It is used by various manufacturers including steel building manufacturers, electrical appliance makers, automobile makers, etc. In this blog, we’d cover the impact of steel on different industries.
When we talk about the impacts of something as important as steel on different industries, it’d normally be anticipated that only the GDP part will be covered. But that’s not where it stops. Though the steel sector has a 0.7% contribution to the global GDP (which is a minimal share), we can’t accept it as the end of the road. The number of employees working in the industry combined with GDP figures only covers the ‘direct impact’. When talking about the impact of steel on various industries, the understanding across direct and indirect impact, consumer impact and environmental impact is necessary.
Direct and indirect impact- social, economic and customer-based
Look around, closely.
We know that some of you actually looked around and pretended using X-ray vision like Superman to find some steel. We are sure that you’d have found a lot of things which previously went unnoticed, right? From kitchen to drawing room, steel is inseparable from our routine lives, forget about its role in industrial lanes.
The various sectors that rely heavily on steel are as follows-
Direct and indirect impact- social, economic and customer-based.
Direct impact encompasses global GDP share and the number of people working. The steel industry has over 6 million people employed globally. Indirect impact, on the other hand, is more inclusive with supply chain impact, i.e. the impact through those who not only provide raw materials but also finished goods and services including energy. Thus, it’s not just about steel usage by industry.
The steel industry sold $2.5 trillion worth of products and created US $500 billion value in 2017 as reported by Oxford Economics as direct impact. On the other hand, the indirect impact generated 13 more jobs throughout the supply chain for every 2 jobs in the steel sector. This means an additional 40.5 million people working in the supply chain! Besides, the supply chain generates $1.2 trillion value addition.
Not just direct and indirect impact but the customer’s perspective should also be a part. The steel industry added $1.2 trillion value in the customer sector besides generating over 49 million jobs globally.
Though iron and steel are the two most recycled materials in the world, steel production has many negative impacts on the environment. The most adverse impact by steel manufacturing process is through air emissions in the form of oxide gases of carbon, sulfur and nitrogen beside coke oven gas, naphthalene, ammonium compounds. The water left after cooling coke in steel processing is highly contaminated, but can be filtered as well.
On the economic and social horizon, the total value-added contribution of the steel industry stood at $8.2 trillion— 10.7% of global GDP in 2017. It also supported 259 million jobs globally. The environmental impact is heavy and technological upgrades alongside government norms are working conjointly towards bringing down the alarming negative numbers globally. The multifold spread of steel over almost every sector clearly indicates that steel manufacturing will continue to grow. Due to easy recycling processes, any grade of steel can be recycled to top quality new metal without any sort of downgrading which gives some relief not from the cost perspective but also with the environmental impacts.