October 2017

October 2017

It’s a shame that the word ‘steel’ has to come into it, but it does, even if the problem involves ‘the miracle metal’ – aluminium – and copper. The fact remains that a steel company (Japan’s third biggest producer, Kobe Steel) has admitted it may have falsified data about the quality of its products. Why this has happened is anybody’s guess, but the admission has had dire consequences for the steelmaker as the products concerned have found their way into aircraft, cars and trains; and the bigger question now is whether or not safety has been compromised.

The question of ‘why’ is important because in the case of Kobe Steel the sorry outcome – $1.6 billion wiped off the company’s market value, shares plunging 18% in Tokyo – has surely negated the effort of falsifying the data in the first place. Wrongdoing, after all, is always uncovered – eventually.

The problem appears to be peculiarly Japanese with other ‘reputable’ companies (Takata Corp and Nissan) both implicated in similar misdemeanours. Nissan is to recall one million cars and Takata pleaded guilty to misleading carmakers over the safety of its airbags. Most worrying, however, is that whenever something like this raises its ugly head, the initial scandal proves to be just the tip of the iceberg.

For Kobe Steel there are potentially big costs involved, not to mention untold harm to the company’s reputation (which will linger for years); and, of course, there will be legal challenges too.

Toyota (a Kobe Steel customer) has described the situation as a ‘grave issue’ and rightly so; and whether Kobe Steel’s conduct is systemic remains to be seen, but either way, surely, the spotlight will now shine brightly on the company’s other products, namely its steel output.

Unauthorised inspectors, misleading automakers, a breach of compliance rules, falsified data – they’re all phrases that would spell trouble for any company and they have certainly put another phrase – ‘Made in Japan’ – on the naughty step.

While aluminium and copper account for just 20% of Kobe Steel’s output, what about steel? And even if steel is not affected by the scandal, the company’s deteriorating reputation will deter potential buyers not only from purchasing Kobe’s steel, but also from buying steel from other Japanese producers.

October 2017 Contents

September 2017

September 2017

Is it just me? I’m now what you might call a ‘frequent flyer’ and while I don’t particularly worry about flying when taking scheduled flights (where the inflight magazines have route maps) I’m always a little apprehensive when aboard a charter flight with a holiday company. I don’t know why, it’s just the way things are – possibly because I have my family with me when normally I fly alone. 

So I’m in a bus on my way to Alghero airport having enjoyed a week of Sardinian sun, and on the day I’m flying home the wind picks up and the rain starts to fall. But all was well, the flight was smooth and the plane landed softly in my ‘safe European home’, although it’s not so safe anymore. These days, there’s no escape from nutters. However, having read Nevil Shute’s On the Beach I figure that if any nation is going to survive a nuclear winter, it will be Australia. That said, with Beach Ball face nearby, firing off missiles like there is no tomorrow and threatening to attack Guam, I’m not so sure.

If you’ve got this far you’ve probably guessed that I’ve returned from my vacation suffering from writer’s block. I’ve been away from the steel industry for a week and I’m floundering, although North Korea seems like a topic worthy of discussion. Every day of last week, while waiting in my hotel room for dinner, I watched a French television channel, broadcast in English, showing footage of the aforementioned Beach Ball consulting with his uniformed cohorts and clapping as missiles were launched into the sky.

North Korea has a steel industry, but it’s not in the big league. While Platts has reported a steelmaking capacity of 12Mt/yr, the country was producing just over 1Mt/yr in 2015. The Kim Chaek Iron and Steel Complex is the country’s star player, capable of producing 6Mt/yr of steel.

Despots with missiles are not to be tolerated and while military action would prove disastrous, the UN has approved more sanctions against the ‘rogue state’ – sanctions which have led North Korea to engage in a sneaky practice of changing the composition and names of its state-run commercial enterprises and putting them under the nominal ownership of individuals to circumvent the latest UN sanctions. Dick Dastardly once said he was so sneaky he didn’t even trust himself, but clearly the Beach Ball has no such qualms.

September 2017 Contents

July-August 2017

July-August 2017

I was roaming through Europe last month, and by that I mean I’ve been to three different countries in the space of three weeks, departing twice from Gatwick and once from Heathrow and visiting Poland, Sweden and Austria before landing back in the UK on a sunny Thursday evening at the end of June.

All three trips were informative in different ways and while I’m not one for blowing my own trumpet, I must say that the first of my three journeys – to Warsaw in Poland – was to the Sheraton Hotel and the inaugural Future Steel Forum, Steel Times International’s first (and highly successful) foray into the world of Industry 4.0 and steel manufacturing.

Avid readers will know that the Future Steel Forum has been high on my agenda for some time and it all came together last month when delegates and speakers met to discuss an increasingly important aspect of the steel manufacturing process, that of digitalisation, ‘smart’ production, however you wish to describe it.

It was good to hear that delegates enjoyed the conference and that they felt an event on the subject of Industry 4.0 was long overdue – especially an event focused on steel. All the more reason to announce that there will be a Future Steel Forum 2018, in Warsaw, at the Sheraton Hotel, in Poland. I’m looking for papers now so if you have something to say about Industry 4.0 and steelmaking, get in touch. 

Hi-tech steelmaking is becoming increasingly popular; everybody’s talking about it and some of the world’s biggest and most progressive steelmakers are rolling up their sleeves and getting on with its development. In South Korea, POSCO and Hyundai are hoping that new technologies can help increase yield rate and reduce defects.

POSCO, in conjunction with the SungKyunKwan University’s department of systems management engineering, has developed automatic coating weight control technology based on artificial intelligence  (AI) with a view to maintaining an optimal and constant coating weight to automotive steel sheets. Similarly, Hyundai has employed AI, developed by Google subsidiary DeepMind, with a view to achieving maximum solidity and, of course, price competitiveness.

There’s a lot to discuss so let me know if you want to be part of the conversation.

July-August 2017 Contents