Innovation, New Technology Key to Steel Industry's Survival

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Researched by Industrial Info Resources (Sugar Land, Texas)--Embrace innovation or accept extinction.

Mario Longhi, president and chief executive officer of United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania), urged attendees to not accept status quo at The Association for Iron & Steel Technology 2016 Conference and Exposition (AISTech) 2016 keynote address: "The Future of Steel."

"The world around us is changing at a remarkable pace," Longhi said. "Industries and businesses like the ones represented in this room today have to adapt quickly and develop solutions to deal with this disruption. If we don't, we run the risk of becoming an answer for a Jeopardy category called 'things that don't exist anymore'."

Longhi highlighted some of what he called the 10 most common disrupters:

1.Urbanization
2.Technology advancements
3.Demographic changes, especially aging populations
4.Interconnectivity of trade, data, finance and people
5.Increasing impact of emerging markets on global economic size and growth
6.Shifts in global capital and finance
7.Constraints on the availability and use of natural resources
8.Shifts in global talent and labor forces
9.Changing an unpredictable policy on regulatory environments
10.Consumers empowered through social media

"We must fully embrace the disruption that is happening all around us so that we can continue being a disrupter ourselves," Longhi said.

While the industry is still very much in crisis, he said, companies like U.S. Steel are fighting back. They have advocated for the S.891 -- Leveling the Playing Field Act, and last month, U.S. Steel became the first steel maker since 1978 to file a complaint with the US International Trade Commission (ITC), requesting an investigation under section 337 of the Tariff Act of 1930. The company has called on regulators to investigate China's largest steel producers and their distributors for allegedly conspiring to fix prices, stealing trade secrets and circumventing trade duties by false labeling (transshipping).

If businesses want to survive, Longhi suggested they must find ways to respond to these trends and drive value for their stakeholders. Evaluate different technologies. He said that is especially true for manufacturers and suppliers in areas such as robotics, 3D printing, automation, nanotechnology and artificial intelligence.

"There is a revolution under way in advanced materials--a race to discover and commercialize the materials that are lighter, stronger, more energy efficient or more versatile," Longhi said. "This will likely include so-called smart materials and coatings, and these materials may use less energy or retain it better. They may be self-cleaning or self-repairing. They could have enormous strength, be extraordinarily small or even retain memory."

Longhi said U.S. Steel has expanded their portfolio of products, which has given access to new markets and opportunities including the research, development and commercialization of generation 3 advanced high strength steels to provide a lighter weight steel for the Automotive Industry to meet fuel economy demands.

"Make no mistake," Longhi said. "We need to create the next generation of solutions to ensure steel remains the material of choice in a variety of applications."

He stressed the importance of not becoming complacent and trying to stay ahead of the curve.

"I'm sure none of the industries we compete against are sitting around waiting to see what we do next," Longhi said. "Their sole focus is meeting the needs of markets they already serve as well as the ones they want to be serving."

He compared the future of steel innovation to some of the historical technological advances and breakthroughs of the past (including the Bessemer Process, open hearth furnace, basic oxygen process, electric arc furnace and continuous casting) that allowed the industry to improve safety, efficiency, quality and environmental performance.

Borrowing a quote from the late Apple co-founder Steve Jobs, "Innovation distinguishes between a leader and a follower," Longhi concluded his keynote address with his last point. "We want our industry to be viewed as a true manufacturing leader and not just the fast follower we have been at times. The path ahead won't always be easy; however, the work being done by all of you gives me hope that we can achieve this goal and much more."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.