The Rise of the Steel Age
From the bronze age to the iron age, metals have defined eras of human history. If our current era had to be defined similarly, it would undoubtedly be known as the steel age.
Steel is the foundation of our buildings, vehicles, and industries, with its rates of production and consumption often seen as markers for a nation’s development. Today, it is the world’s most commonly used metal and most recycled material, with 1,864 million metric tons of crude steel produced in 2020.
This infographic uses data from the World Steel Association to visualize 50 years of crude steel production, showcasing our world’s unrelenting creation of this essential material.
The State of Steel Production
Global steel production has more than tripled over the past 50 years, despite nations like the U.S. and Russia scaling down their domestic production and relying more on imports. Meanwhile, China and India have consistently grown their production to become the top two steel producing nations.
Below are the world’s current top crude steel producing nations by 2020 production.
|Rank||Country||Steel Production (2020, Mt)|
|#5||🇺🇸 United States||72.7|
|#6||🇰🇷 South Korea||67.1|
Source: World Steel Association. *Estimates.
Despite its current dominance, China could be preparing to scale back domestic steel production to curb overproduction risks and ensure it can reach carbon neutrality by 2060.
As iron ore and steel prices have skyrocketed in the last year, U.S. demand could soon lessen depending on the Biden administration’s actions. A potential infrastructure bill would bring investment into America’s steel mills to build supply for the future, and any walkbalk on the Trump administration’s 2018 tariffs on imported steel could further soften supply constraints.
Steel’s Secret: Infinite Recyclability
Made up primarily of iron ore, steel is an alloy which also contains less than 2% carbon and 1% manganese and other trace elements. While the defining difference might seem small, steel can be 1,000x stronger than iron.
However, steel’s true strength lies in its infinite recyclability with no loss of quality. No matter the grade or application, steel can always be recycled, with new steel products containing 30% recycled steel on average.
The alloy’s magnetic properties make it easy to recover from waste streams, and nearly 100% of the steel industry’s co-products can be used in other manufacturing or electricity generation.
It’s fitting then that steel makes up essential parts of various sustainable energy technologies:
- The average wind turbine is made of 80% steel on average (140 metric tons).
- Steel is used in the base, pumps, tanks, and heat exchangers of solar power installations.
- Electrical steel is at the heart of the generators and motors of electric and hybrid vehicles.
The Steel Industry’s Future Sustainability
Considering the crucial role steel plays in just about every industry, it’s no wonder that prices are surging to record highs. However, steel producers are thinking about long-term sustainability, and are working to make fossil-fuel-free steel a reality by completely removing coal from the metallurgical process.
While the industry has already cut down the average energy intensity per metric ton produced from 50 gigajoules to 20 gigajoules since the 1960s, steel-producing giants like ArcelorMittal are going further and laying out their plans for carbon-neutral steel production by 2050.
Steel consumption and demand is only set to continue rising as the world’s economy gradually reopens, especially as Rio Tinto’s new development of atomized steel powder could bring about the next evolution in 3D printing.
As the industry continues to innovate in both sustainability and usability, steel will continue to be a vital material across industries that we can infinitely recycle and rely on.
Shrinking Portions: Visualizing Rising Food Prices
The UN’s Food and Agricultural Organization’s food price index has increased since mid-2020 for nine months straight, with meat prices lagging behind.
The Global Food Price Index Continues Rising in 2021
Food expenditures as a portion of disposable income have trended downwards in the U.S. for more than 50 years, but the trend could be reversing as food prices have risen sharply over the past months.
Since June 2020, the UN’s Food and Agriculture Organization’s (FAO) food price index has risen for nine consecutive months, with almost every food group setting new three-year highs in 2021. If the trend continues, food prices could begin to outpace income growth and monetary support from governments.
The one outlier in changing food prices has been meat prices, which have lagged behind with a minimal increase since mid-2020.
This graphic tracks the FAO’s food price indices along with their year-over-year (YoY) changes, showing the rapid price increases many of our staple food groups have had over the past year.
The Rising Food Prices of 2020 and 2021
Over the past five years, the FAO’s food price index has fluctuated by a few percentage points, but the arrival of the COVID-19 pandemic brought significant volatility.
Sugar and vegetable oils saw the largest changes, dropping by double-digit percentages (-19.2% and -12.4% respectively) in March of 2020, before recovering with the strongest overall price surges of the various food groups.
Food Price Indices Month-over-Month Change
|Date||Food Price Index MoM Change||Meat Price Index MoM Change||Dairy Price Index MoM Change||Cereals Price Index MoM Change||Vegetable Oils Price Index MoM Change||Sugar Price Index MoM Change|
The food price index increased by almost 17% YoY going into 2021, and while dairy, cereals, sugar, and vegetable oil prices all increased by double-digit percentages, meat prices rose less than 1% on average in 2021.
Surging Demand for Food at Home Drives Higher Prices
Although food prices have always fluctuated depending on weather conditions and global trade affecting food supply, this year’s increases were especially driven by a weakening U.S. dollar and increased demand due to the COVID-19 pandemic.
The pandemic resulted in severe changes to the world’s eating habits, with restaurant walk-ins and reservations down by more than 60% while demand for food at home increased as people stocked up on essentials.
To go alongside this, trade and supply chain disruptions in essential agricultural materials like fertilizer resulted in an inconsistent output from farmers and food producers, causing issues right as demand surged.
Meat and Dairy Prices Aren’t Keeping Up
As other food prices rise, the lack of significant increases in meat prices could reflect the avoidance of more expensive food products during tighter times, a lack of supply chain disruptions and constraints compared to agricultural sectors, or a larger societal trend of reduced animal product consumption.
Although dairy prices increased by 10% YoY in 2021, this increase was less than half of the price increases of cereals and sugar (21.7% and 22.3% respectively), and less than a quarter of vegetable oils prices which rose by 44%.
Plant-based alternatives are rapidly growing in popularity as nearly one in four Americans are reducing their meat consumption while veganism is rising in select European nations. Interestingly, despite these trends, 2020 also saw U.S. meat purchases rise as 43% of Americans have been buying more meat since the start of the pandemic.
Fighting the Fear of Inflating Food Prices
Whether meat prices catch up soon or not, the general trend of rising food prices poses a new inflationary pressure upon people around the world.
With in-restaurant dining taking a backseat, the increased prices are felt by everyone as they stock their cupboards, and inflation fears have been brewing as nations make their way out of the pandemic.
Rising government deficits and an increasing money supply represent efforts by governments to support citizens and national economies, but could ultimately be a key factor fueling the rising food prices.
One thing is certain, if food prices continue rising by double-digit percentages in the coming months and years, incomes and government support will struggle to keep up.
Breaking the Ice: Mapping a Changing Arctic
As the Arctic becomes more accessible due to reduced ice cover, countries with polar real estate increasingly viewing the region through an economic lens.
Breaking the Ice: Mapping a Changing Arctic
The Arctic is changing. As retreating ice cover makes this region more accessible, nations with Arctic real estate are thinking of developing these subzero landscapes and the resources below.
As the Arctic evolves, a vast amount of resources will become more accessible and longer shipping seasons will improve Arctic logistics. But with a changing climate and increased public pressure to limit resource development in environmentally sensitive regions, the future of northern economic activity is far from certain.
This week’s Chart of the Week shows the location of major oil and gas fields in the Arctic and the possible new trade routes through this frontier.
A Final Frontier for Undiscovered Resources?
Underneath the Arctic Circle lies massive oil and natural gas formations. The United States Geological Survey estimates that the Arctic contains approximately 13% of the world’s undiscovered oil resources and about 30% of its undiscovered natural gas resources.
So far, most exploration in the Arctic has occurred on land. This work produced the Prudhoe Bay Oil Field in Alaska, the Tazovskoye Field in Russia, and hundreds of smaller fields, many of which are on Alaska’s North Slope, an area now under environmental protection.
Land accounts for about 1/3 of the Arctic’s area and is thought to hold about 16% of the Arctic’s remaining undiscovered oil and gas resources. A further 1/3 of the Arctic area is comprised of offshore continental shelves, which are thought to contain enormous amounts of resources but remain largely unexplored by geologists.
The remaining 1/3 of the Arctic is deep ocean waters measuring thousands of feet in depth.
The Arctic circle is about the same geographic size as the African continent─about 6% of Earth’s surface area─yet it holds an estimated 22% of Earth’s oil and natural gas resources. This paints a target on the Arctic for exploration and development, especially with shorter seasons of ice coverage improving ocean access.
Thawing Ice Cover: Improved Ocean Access, New Trading Routes
As Arctic ice melts, sea routes will stay navigable for longer periods, which could drastically change international trade and shipping. September ice coverage has decreased by more than 25% since 1979, although the area within the Arctic Circle is still almost entirely covered with ice from November to July.
|Northern Sea Route||4,740 Nautical Miles||6 weeks of open waters|
|Transpolar Sea Route||4,179 Nautical Miles||2 weeks of open waters|
|Northwest Passage||5,225 Nautical Miles||Periodically ice-free|
|Arctic Bridge||3,600 Nautical Miles||Ice-free|
Typically shipping to Japan from Rotterdam would use the Suez Canal and take about 30 days, whereas a route from New York would use the Panama Canal and take about 25 days.
But if the Europe-Asia trip used the Northern Sea Route along the northern coast of Russia, the trip would last 18 days and the distance would shrink from ~11,500 nautical miles to ~6,900 nautical miles. For the U.S.-Asia trip through the Northwest Passage, it would take 21 days, rather than 25.
Control of these routes could bring significant advantages to countries and corporations looking for a competitive edge.
Competing Interests: Arctic Neighbors
Eight countries lay claim to land that lies within the Arctic Circle: Canada, Denmark (through its administration of Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States.
There is no consistent agreement among these nations regarding the claims to oil and gas beneath the Arctic Ocean seafloor. However, the United Nations Convention on the Law of the Sea provides each country an exclusive economic zone extending 200 miles out from its shoreline and up to 350 miles, under certain geological conditions.
Uncertain geology and politics has led to overlapping territorial disputes over how each nation defines and maps its claims based on the edge of continental margins. For example, Russia claims that their continental margin follows the Lomonosov Ridge all the way to the North Pole. In another, both the U.S. and Canada claim a portion of the Beaufort Sea, which is thought to contain significant oil and natural gas resources.
To Develop or Not to Develop
Just because the resources are there does not mean humans have to exploit them, especially given oil’s environmental impacts. Canada’s federal government has already returned security deposits that oil majors had paid to drill in Canadian Arctic waters, which are currently off limits until at least 2021.
In total, the Government of Canada returned US$327 million worth of security deposits, or 25% of the money oil companies pledged to spend on exploration in the Beaufort Sea. In addition, Goldman Sachs announced that it would not finance any projects in the U.S.’s Arctic National Wildlife Refuge.
The retreat of Western economic interests in the Arctic may leave the region to Russia and China, countries with less strict environmental regulations.
Russia has launched an ambitious plan to remilitarize the Arctic. Specifically, Russia is searching for evidence to prove its territorial claims to additional portions of the Arctic, so that it can move its Arctic borderline — which currently measures over 14,000 miles in length — further north.
In a changing Arctic, this potentially resource-rich region could become another venue for geopolitical tensions, again testing whether humans can be proper stewards of the natural world.
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