Top trends impacting global steel rebars market

The demand for energy for use in industries has been on the rise. However, the natural resources used to produce this energy are fast depleting, prompting manufacturers to tap renewable energy resources. Here, steel rebars will play a significant role in construction and development of infrastructure for the generation of power from renewable energies such as the solar, tidal, and wind. The global wind industry is expected to grow at a CAGR of 15%-17%, while the global solar energy market is expected to grow at a CAGR of 13%-15%.

According to Chandrakumar Badala Jaganathan, a lead analyst at Technavio for metals and minerals sector, “Steel producers are also working with the solar industry to explore innovations in generating electricity. All these application will lead to higher demand for steel rebars in the next five years.”

Steel is the world's most important engineering material but its production is extremely energy-intensive. Technological advancements and extensive R&D such as the use of steel scrap as raw material have reduced the high consumption of energy in the production process. Once successful, this will lead to reduced emissions of greenhouse gases and will help combat climate change. Using steel rebars as a sustainable material will contribute to the market growth during the forecast period.

China has the largest excess steel capacity in the world. According to the draft released by the Chinese government, Steel Industry Adjustment Policy (2015 revision), the Chinese steel industry will move toward a new economic model to deal with the excess steel capacity. It also aims at achieving 80% capacity utilization by 2017. To reach this level, Chinese steel sectors will need to reduce 112.5 million metric tons of capacity per year, keeping the production constant.

In Europe, there was a temporary closure of capacity after the global financial crisis. However, only 5% capacity has been permanently closed since 2009. “According to the Organisation for Economic Co-operation and Development, there will be a decline of 2 million metric tons of capacity from 2013 to 2017. Steel plants in Europe are running at lower capacity utilization,” says Chandrakumar.

Countries such as India and China are increasing the use of scrap iron to reduce carbon footprint. Recycling of scrap improves the industry's economic viability and reduces the environmental impact by eliminating the need for iron ore extraction for steel production. This reduces carbon dioxide emissions significantly, saving energy and water consumption and reducing air pollution.

In addition, a ban on nickel ore exports is also expected to increase the use of steel scrap for rebar production. Nickel ore is widely used for the production of steel in China, one of the largest consumers of steel. However, the ban on exports by Indonesia has led to a shortage of this raw material. Thus, the use of steel scrap as raw material for the production of steel rebar is increasing.