Reassessing Metal: How Falling Cement Use Alters Future Projections

My current on-line dialog with Scott Norris, a structural metal knowledgeable and Director of Engineering Options at Steelcon, prompted me to reexamine some assumptions I had beforehand made about world metal demand projections. Scott, whose sensible expertise inside the metal business grants him clear insights into present operational constraints and near-term realities, challenged my earlier views, significantly concerning how metal manufacturing will evolve alongside cement use within the coming a long time.

Initially, my projections assumed a continued strong, if slower, progress trajectory for world metal demand by means of mid-century, pushed by persistent world infrastructure enlargement in creating nations. However now, reflecting on rising developments inside the cement sector and deeper scrutiny of underlying demand drivers, I’m more and more satisfied that I’ve overstated metal’s long-term progress potential.

Cement and metal are carefully intertwined, with roughly half of world metal demand tied on to development and infrastructure—exactly the sectors driving cement consumption. I’d carried out my preliminary metal analysis and projection earlier than I made it to cement. Within the first half of 2024 I spent weeks digging by means of cement with the entire alternate options to its use that existed commercially, in coverage and within the lab earlier than projecting considerably falling cement demand by means of the century.

Six months after I’d printed my projection, the World Cement Affiliation printed a key whitepaper agreeing that world cement demand will quickly peak after which steadily decline as we transfer towards mid-century, pushed by a mixture of accomplished urbanization cycles in developed economies and shifting constructing strategies globally.

China’s unprecedented build-out over the previous few a long time is quickly drawing to an in depth, and the chance of one other nation matching China’s huge scale of cement-based infrastructure progress seems exceedingly low. In each metal and cement, China represents half of world demand and manufacturing, its inhabitants is 20% of the world’s and its financial system is among the many prime three largest, counting Europe as a complete. If its volumes are declining and US and European volumes are flat or declining, then it’s tough to see world metal demand rising. India’s financial progress, as an illustration, is closely service-driven, and the nation’s present city infrastructure already limits the potential for a China-like development increase. Equally, different creating areas reminiscent of Southeast Asia, whereas actually increasing, appear unlikely to observe a trajectory something like the size of China’s previous three a long time.

Norris rightly factors out that the creating world, India and components of Southeast Asia particularly, will nonetheless expertise progress in metal demand. He notes that India alone is concentrating on important progress in metal manufacturing, aiming to double its output to round 300 million tonnes by 2030 and doubtlessly reaching 350–500 million tonnes by mid-century. Southeast Asian nations, notably Vietnam and Indonesia, are equally positioned to expertise metal demand will increase over the approaching a long time. Norris’ argument rests totally on near-term infrastructure commitments: many nations are actively constructing new blast furnace-based metal crops, which is able to lock in a long time of typical metal manufacturing. These blast furnaces sometimes function for 40 to 50 years, which means amenities constructed right now may realistically proceed working into the 2080s with out policy-driven retirements.

Observe that wherever I ascribe a perspective or opinion to Norris, it’s based mostly on my interpretation of his feedback and posts of projections that I reviewed, and will not precisely seize his perspective. Any errors are mine.

Whereas Norris’s perspective underscores vital sensible constraints and near-term realities, I nonetheless query whether or not these projected will increase will in the end manifest on the magnitude presently anticipated. A lot hinges on the extent to which the worldwide financial system embraces different constructing practices, materials effectivity, and new structural applied sciences.

Cross-laminated timber, as an illustration, has emerged as a genuinely viable and quickly rising different to standard metal and concrete constructions, and for more and more tall buildings, with a 50 story tower beneath development within the USA. Timber development presents substantial advantages in materials effectivity, requiring considerably much less mass per unit of structural power. This straight interprets to diminished metal and concrete use in foundations and structural parts, doubtlessly undercutting conventional metal demand forecasts considerably. Already, timber-framed buildings are gaining traction globally, supported by their substantial embodied carbon benefits over concrete and metal constructions.

If 50% of demand for metal is in infrastructure and buildings, China’s demand is declining, new buildings pivot more and more to CLT, western constructing is gradual with extra renovations and the developed world leverages its forestry assets for extra CLT moderately than constructing elevated blast furnaces, then it’s tough to venture a rise in metal demand. Moderately, we is perhaps at peak metal right now.

One other vital consideration is the query of metal scrap availability. Norris identifies what he phrases a “scrap valley”, a projected scarcity of recycled metal adequate to satisfy electrical arc furnace (EAF) demand till round 2045, when he initiatives a scrap tsunami. He bases that on a wonderful strategy of contemplating the median age of scrapping throughout segments in a long time, then making use of that manufacturing years to reach at a spread of accessible scrap for the approaching years by means of 2050. He notes that present projections from the World Metal Affiliation anticipate that even by mid-century, scrap-based metal manufacturing will account for less than half of world metal output, agreeing along with his projections, necessitating continued reliance on virgin iron sources reminiscent of direct diminished iron (DRI).

My very own analysis, nonetheless, factors to doubtlessly huge untapped scrap sources tied up in fossil gasoline infrastructure that’s quickly changing into out of date as a result of world power transition. For instance, in the US alone, fossil gasoline pipelines comprise sufficient embedded metal to provide round 4 years of the whole nation’s metal demand. With 65% of world delivery being of bulks which can be in structural decline — coal, fuel, oil and uncooked iron ore — the present ships and most of the ones simply being commissioned are going to be big sources of scrap. Ships already see one of many highest ranges of scrap reclamation for metal when decommissioned, and the present peak of bulkers, with 50% of them steaming to China’s factories, are going to be heading to the scrapping seashores.

This substantial quantity of metal will develop into accessible as fossil gasoline infrastructure is more and more retired, dismantled, and repurposed. As such, whereas Norris and the IEA think about a looming scrap shortfall that stops important progress of electrical arc furnaces, I take a look at it from a cross-domain perspective and see a a lot decrease constraint on scrap availability..

Reevaluating these sector-specific elements additional reinforces my rising conclusion: the sooner assumptions about continued metal demand progress want important moderation. Transportation infrastructure, one other main metal client, faces elementary shifts as many nations transfer away from in depth street networks towards mass transit and rail, that are steel-intensive however inherently extra environment friendly and fewer expansive than freeway development.

Equally, automotive metal demand progress could flatten significantly as electrical autos emphasize light-weight supplies — aluminum, composites, and specialised high-strength alloys — that regularly scale back metal content material per automobile. Likewise, the power sector’s metal demand faces a posh transition. Fossil fuel-based infrastructure — oil rigs, pipelines, coal energy crops, ships — traditionally offered important metal demand. However with fossil infrastructure diminishing, steel-intensive renewable power infrastructure, primarily wind generators, and grid expansions, could initially offset some metal demand. But, ultimately, as soon as renewable build-out stabilizes, this section’s demand may stage off or decline reasonably as properly.

Equipment and industrial tools will stay strong sources of metal demand, pushed largely by world industrialization, technological transitions, and the shift towards automated manufacturing processes. But even right here, effectivity enhancements and different materials substitutions—reminiscent of aluminum alloys and composites—could curb the magnitude of progress. The metal utilized in heavy industrial equipment stays difficult to interchange, however incremental enhancements in effectivity and rising supplies may regularly gradual demand progress. The web impact throughout all sectors, then, is a moderated metal demand outlook. It received’t lower as quickly as coal, however my projection is altering to a lower in absolute volumes over the approaching decade.

This adjusted metal demand projection carries implications for world decarbonization pathways. A moderated demand trajectory eases the trail towards attaining a totally decarbonized metal business. Diminished total volumes imply the reliance on virgin iron manufacturing applied sciences, reminiscent of hydrogen-based DRI or molten oxide electrolysis, can stay manageable moderately than needing huge scale-up, whereas elevated scrap availability additional accelerates the shift towards recycling-based EAF manufacturing.

These dynamics sharply scale back the need for transitional or interim applied sciences reminiscent of natural-gas-based DRI mixed with carbon seize, applied sciences Norris highlights as essential bridging options. As a substitute, we’d realistically count on the metal sector to transition extra shortly and straight towards absolutely renewable-based strategies, leveraging ample scrap metal and renewable-powered hydrogen manufacturing earlier and extra extensively than present typical business projections anticipate.

As all the time with my projections, it’s vital to recollect a small handful of issues. The primary is that I don’t declare to be proper, merely much less flawed than most. The second is that these are coarse eventualities with very giant error bars. They’re meant to assist us take into consideration the long run in addition to coverage and technique. The third is that as a result of I look throughout a number of domains, my projections inform each other in a means that maybe specialists like Norris may not as readily obtain.

My dialogue Norris underscores the important worth of frequently revisiting and difficult assumptions. Skilled exchanges like ours illuminate gaps, alternatives, and rising realities that refine our understanding of complicated business dynamics. The evolution of metal demand shouldn’t be merely a query of market developments or technological readiness, however a mirrored image of deep structural adjustments in world growth patterns.

At coronary heart, cement and metal demand trajectories stay essentially related, and as we alter our expectations downward for world cement consumption, it turns into more and more obvious that metal demand forecasts require comparable recalibration. Transferring ahead, continued crucial analysis of those interlinked assumptions is important to precisely projecting—and in the end driving—world decarbonization efforts.