vision research areas pr room contact us main asian steel watch vol . 2 press release october 2016 press release on october 11 2016 posco research institute posri released the second issue of asian steel watch asw . this bi annual english journal is specialized in the asian steel industry and market . it deals with current issues in the asian steel industry and features interviews with industry leaders market analysis and forecasts . it is comprised of five sections on the cover interview special report featured articles and market trend and analysis . asian steel watch aims to provide insightful in depth analysis of the ever changing conditions of the asian steel market . the second issue of asian steel watch focuses on the fourth industrial revolution in the steel industry smart factory chinese steel e commerce the effect of demographic cliff on the asian steel market the restructuring of china s steel industry myanmar s steel industry super cycles and northeast asian steel trade market . this journal hopes to grant insight into the asian steel industry lay a firm foundation for the collaborative growth of asia s steel industry and further contribute to the stability and prosperity of the global steel market . asian steel watch vol .2 addresses the following issues in the on the cover section four articles are covered under the main theme of the fourth wave of manufacturing what it means to the asian steel industry . the fourth industrial revolution the winds of change are blowing in the steel industry with the advancement of the fourth industrial revolution many traditional industries now face the destruction of industrial structures and countries are intensifying competition to take the leadership in the future of manufacturing . under these circumstances manufacturing will face new changes in the future . on the consumers front the era of mass personalization will be heralded and dynamic intelligence real time enterprise and servitization will become new trends on the suppliers front . the fourth industrial revolution is also gaining ground in the steel industry and new changes are becoming apparent . ge has a long history and tradition as an automation company in power generation and energy but it has declared itself to be a software company . likewise a steel company in the fourth industrial revolution might need to become a software engineering company that produces steel not a company that buys and uses software well . accelerating digital transformation with smart factory to unlock new value case of posco in the face of the great paradigm shift brought on by the fourth industrial revolution many asian steelmakers are taking preemptive measures to maintain competitiveness and contribute to the advancement of manufacturing . posco is also one of the leading global steelmakers in this arena . posco is building the world s first continuous process steel plant model in its gwangyang steelworks plate factory that houses integrated processes for steelmaking continuous casting and rolling . posco has achieved major outcomes in the realization of a smart factory such as the development of the digital genome map to tackle challenges of smart factory initiatives and the construction of posframe posco s smart factory platform for continuous process industries . it also has conducted various smart factory projects including material to final product defect tracking minimizing unnecessary scarfing in the continuous casting process and new product development simulation in cyberspace . china is shifting to the smart factory of the world to prepare for the fourth industrial revolution represented by industry 4.0 in germany and industrial internet in the usa the chinese government released the made in china 2025 policy in may 2015 and the internet plus action plan two months later . the chinese government s massive support makes the prospect of smart factories even brighter . it plans to designate two to three companies in each industry to support the construction of smart factories . using its vast market as a bargaining chip in summit diplomacy china induces cooperation from advanced global firms . as a result china can elicit technological support for smart factories from advanced countries . however it would take much time and energy to fully realize smart factories in china s manufacturing and steel industries . just as the explosive growth of china s steel industry has shocked the world in the early 21st century the world might be shocked again by china if it successfully adopts industry 4.0 and smart factories in the future . the rise prospects and impact of china s steel e commerce china s steel e commerce is gaining ground in china . the rapid growth of china s steel e commerce after 2012 was caused by three factors that collectively intensified competition in online platforms the changing landscape of the steel trading market due to a slump in china s steel industry ; china s internet plus and other related policies ; and an online fever across the industry . the chinese government aims to increase total steel trade through e commerce by about 20 % or 150 200 mt until 2020 . china s steel e commerce market will be led by a few competitive firms . most steel e commerce firms in china are pioneering or considering overseas expansion . therefore their influence will become stronger in overseas markets . as china s steel e commerce develops the functions of offline steel traders in countries which import chinese steel products will be reduced . in this process existing offline steel distribution channels will be upgraded through integration with online channels . interview with edwin basson director general of worldsteel on the subject of roads ahead for the steel industry . edwin basson director general of worldsteel talked to asian steel watch about major issues and future of the steel industry 1 causes of sluggish global steel demand and forecast for 2017 2 china s peak steel and long term forecast for china s steel demand 3 solutions to overcapacity 4 future of the asian steel industry and 5 influence of the fourth industrial revolution on the steel industry . 1 causes of sluggish global steel demand and demand forecast for 2017 the steel industry is affected by structural and cyclical fluctuations of the global economy . the year 2016 will be the turning point and most regions will show improvement in 2017 but growth momentum will continue to be weak reflecting continued contraction in china and weakness in other parts of the world . 2 china s peak steel and long term forecast for china s steel demand steel use grows fast but then reaches a peak at or close to the upper inflection point on the s curve before a long term decline in steel use takes place . this happens at a per capita income level of around usd 12 000 15 000 . china has reached peak steel at a rather earlier stage of economic development compared with the experiences of developed economies as it has accomplished a very condensed development in a relatively short time period . recent studies by the worldsteel economics team highlight a number of unique cases where after the first peak steel use recovered to the same or even higher levels of use . the future development of western china the continued capability of china as a competitive manufacturing base and the geographical location of china could contribute to a new momentum in steel demand growth in the future . 3 solutions to overcapacity reducing excess capacity is never an easy task largely because of many hidden barriers to exit . capacity reduction can have a significant impact on the balance sheets of operating companies and are never popular with investors . china has publically announced the closure of up to 150 million tonnes over a five year period . with the determination of the current government to tackle the overcapacity problem and environmental protection we should trust that china will be able to meet this target . foremost for worldsteel is to insist that industry restructuring should take place on a level playing field principle and that restructuring should follow similar principles wherever it is done . to that effect worldsteel members have agreed to the following principles on restructuring 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 survival of the fittest producers . inefficient producers should not be subsidized to remain in operation . barriers to exit 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 . 4 future of the asian steel industry today steel use is predominantly in asia which accounts for 65 % of global steel use . asia as a region has a large population . moreover in many asian countries the economies are progressing rapidly up the economic development path . given these conditions it is likely that asia will remain a driving force in steel use in the foreseeable future . future growth will likely depend more on the development of the asean region and growth in india strongly supporting developments in the south east asian markets . 5 influence of the fourth industrial revolution on the steel industry the steel industry has a long history of technological adaptation and product innovation . today 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 but additional progress will be incremental owing to the already high level of technological achievement . it is rather in the field of the use of steel in applications that the fourth industrial revolution could play an important role . the fourth industrial revolution may influence the design and production of consumer goods to the extent that waste is reduced and the lifetime of steel in use increases . it is therefore quite possible that the fourth industrial revolution will have little direct influence on the steel industry . the indirect influence through changing the manufacturing process and product design of items requiring steel as an input may have a vastly more influential role in the steel industry . special report dong joon min professor of the department of materials science and engineering at yonsei university in korea introduces the midi mill process route of the finex and cem combination under the title global competitiveness through hybridization of finex and cem processes . under the current oversupply and strengthened environmental regulations it is burdensome for steelmakers to consider new investment in the maxi mill combination of a traditional bf and hot rolling mill . in the mini mill process there are some limitations in producing flat steel products due to harmful tramp elements in raw materials of scrap and high electricity costs . the needs of diversification of raw materials and flexibility of process will accelerate the development of an alternative midi mill ironmaking route by hybridization of individually optimized steelmaking technologies . the recent concept for hybridization is comprised of the finex and cem technologies with particular attention on a sustainable midi mill process with high flexibility . the hybridization of the finex and cem processes can provide high versatility by combining the advantages of their technological characteristics . future process should adopt a process route that lies somewhere between the maxi mill and mini mills that is a midi mill configuration with a production capacity over 2 mtpy and operational flexibility . finex has more flexibility in raw materials and operations than the blast furnace route and higher productivity than the eaf route . cem can achieve high throughput and meet product requirements by converting from batch