Future Cities and Changes in Steel Materials

Size: px

Start display at page:

Download "Future Cities and Changes in Steel Materials"

Barnaby Fleming
6 years ago
Views:

1 FUTURE MEGATRENDS AND THE STEEL INDUSTRY Kim Hoon-sang Senior Principal Researcher, POSCO Research Institute Future Cities and Changes in Steel Materials Urbanization, the key driver for the construction industry The megatrend of urbanization is a key driver in the development of the global construction industry. The global proportion of the urban population increased from a mere 29% in 1950 to surpass that of the rural population in By 2050, about 9.5 billion people, or 66% of the global population, is expected to reside in urban areas. This means that the number of urban dwellers will increase by an annual average of 100 Figure 1. Global Urban and Rural Population (million people) Urban Rural 7,000 6,000 5,000 4,000 3,000 2,000 1, Source: World Urbanization Prospects, United Nations, million people. Urbanization will further accelerate in the future with rapid industrialization in developing countries and the shift to a knowledge economy in advanced countries. Urbanization aggravates existing urban concerns such as housing, transportation, water supply and sewage, and electricity provision, which in turn stimulates investment in construction. Global construction investment stood at roughly USD 9 trillion in 2015, but is expected to increase by a CAGR of 2% to USD 13.4 trillion by Notably, growth in global construc- Figure 2. Global Construction Investment % 2.6% 2.0% 2.5% 1.6% % 1.0% 2.2% 2.4% 1.8% Source: POSCO Research Institute based on IHS Markit (USD trillions) Plant Commercial Infra Residential 32 Asian Steel Watch

2 Future Cities and Changes in Steel Materials Figure 3. The Rise of New Urban Trends Urbanization Growing Cities Commercial, Infrastructure etc. Mega Cities Large Structures Buildings & Bridges Smart & Green Cities IoT connected infrastructure, Recycle, Reuse Four billion people among the world s population of 7.3 bil. live in cities ( 15) tion investment will vary by sector: investment in residential, commercial, and infrastructure construction will soar, while plant construction investment will lag historical performance, following a shift of focus to new and renewable energy in response to global warming and environmental pollution. Emerging urban trends megacities, green cities, and smart cities Within the overall shift toward urbanization, megacities, green cities, and smart cities are emerging as new trends. In the future, there will be an increasing number of megacities with 10 million or more inhabitants, smart cities drawing on the Fourth Industrial Revolution, and green cities that consume fewer resources and recycle more. 1 Megacities Rising higher and further The number of megacities with populations of more than 10 million is expected to increase by 32.3% from 31 in 2016 to 41 by Likewise, the number of cities with more than 500,000 poeple will increase by 31% from 1,063 in 2016 to 1,393 by 2030, according to the World's Cities in 2016, United Nations. As the competition paradigm shifts from competition among countries to competition among cities, many countries are actively crafting policies to develop their cities as globally competitive megacities. In April 2016, Saudi Arabia formulated its Long-term Strategy 2030 (Vision 2030) and released related five-year action plans. Under this Vision 2030, Saudi Arabia plans to have three of its cities recognized among the top-ranked 100 cities in the world.1 The rise of megacities through competition among cities is well reflected in the construction of landmark skyscrapers. The number 1 of supertall buildings over 300 meters tall 2 doubled between 2012 and According to the Council on Tall Currently, 100 supertall buildings are Buildings and Urban Habitat, under construction around the world. supertall buildings are defined as This figure is expected to double to 200 buildings of 300 meters or higher. Vol.03 June

FUTURE MEGATRENDS AND THE STEEL INDUSTRY Figure 4. The Sky Mile Tower in Tokyo Source: en.wikipedia.org by 2020. 3 plug.hani.co.

3 FUTURE MEGATRENDS AND THE STEEL INDUSTRY Figure 4. The Sky Mile Tower in Tokyo Source: en.wikipedia.org by plug.hani.co.kr/futures As of 2017, the world s tallest building is the Burj Khalifa in the UAE at 828 meters height and 163 stories. This structure was designed to be the centerpiece of a large-scale, mixed-used development that includes apartments, hotels, offices, department stores, and shopping centers. In addition to land use efficiency, global warming is accelerating the demand for skyscraper construction. Experts warn that if sea levels rise by just one meter, many major low-lying coastal cities including Shanghai and Tokyo could be submerged, suggesting supertalls as a potential response. The Sky Mile Tower, which has been proposed for the Tokyo of the future, could reach as high as 1,700 meters, or twice the height of the Burj Khalifa. This mega-tall building scheduled to be constructed by 2045 is viewed as a response to rising sea levels. It could hold roughly 500,000 people, including 55,000 residential units, shopping malls, restaurants, hotels, gyms, and medical centers. Japan has even gone as far as envisioning a self-contained high-rise city that could house over one million people the X-Seed Currently there are technical obstacles to constructing such a mega-tall building reaching a whopping 4,000 meters and 800 stories. If construction technologies and advanced construction materials are developed, this structure could become a reality. This mountain-like building towering thousands of meters high is imagined as a space isolated from the ground. Future forecasts predict that cities in the air, secluded from the land, will loom large in a mega-tall building boom. Population increases, urban expansion, rising land prices, and resource shortages will last until the end of 21st century, eventually driving up the height of buildings. 3 2 Green cities Go greener Ozone depletion, climate change, and energy and resource exhaustion can undermine the sustainable development of humanity and degrade the quality of life of urban dwellers. With a growing sense of obligation to improve the environment, the paradigm is shifting to eco-friendly cities. Construction materials will be recycled or used in smaller quantities, and buildings will be restored or rebuilt rather than being constructed from scratch. Leadership in Energy and Environmental Design (LEED), a rating system that is recognized as an international mark of excellence for green buildings by the U.S. Green Building Council, is now being applied to only some new buildings, but it will soon become more wide- 34 Asian Steel Watch

4 Future Cities and Changes in Steel Materials spread and provide mandatory standards for all building designs. A transition to green cities will provide a wealth of business opportunities to private enterprises. Companies will be able to diversify their businesses to the development of eco-friendly technologies and construction materials for reducing environmental impact, new and renewable energy development, and zero-energy houses, contributing to the development of greener and safer cities. Public investment in traditional construction efforts such as roads and bridges will be reduced, but will increase for green sectors such as railways, green energy, and green public construction. The green city concept is reflected in solar- City in Linz, Austria. This is an eco-friendly and energy-efficient residential district designed for sustainable development under Linz City s Lokale Agenda 21. Linz City provides subsidies for solar installations for heating and power generation and rainwater harvesting systems. Already, onethird of heating within solarcity is provided using solar energy, and the rest comes from renewable energy generated by waste incineration.4 In addition to eco-friendly residential districts like solarcity, vertical urban farms are another interesting example of green city techniques. Vertical farming is the practice of producing food in vertically stacked layers. As nature has been devastated by the ever-expanding agricultural production required by increasing populations and food shortages, vertical farming is emerging as an alternative response. Using eco-friendly energy, vertical farming can achieve high productivity throughout the year without suffering damage Figure 5. An Example of Vertical Urban Farm Source: shutterstock.com from climate abnormalities or blights and harmful insects. 3 Smart cities Cities becoming smarter The construction industry is a product of integration and convergence. This field requires the involvement of a great number of backward-linked industries such as design, engineering, technology, and equipment to build structures on demand, and also has high forward-backward linkage effects. Information Technology (IT) represents the type of industry from which the construction industry can seek convergence to create added value and stake an early claim to new markets. One case in point is smart cities. A smart city is defined as a city that integrates IT technology within the operations of the city to maximize efficiency in urban functions such as energy use, transportation, and risk reduction. In the past, 4 Urban Renewal Projects in Linz, Australia, Kim Sang-won, August 2015; Linz Life ( english/life/3199.asp) Vol.03 June

5 FUTURE MEGATRENDS AND THE STEEL INDUSTRY Figure 6. Smart City Construction and ICT Buildings Human Beings Cars Machines Devices Other assets City system: Transportation Water, energy... Heating, cooling Material cycles Surveillance and security Material cycles Communication Remote monitoring Diagnostics and fault detection Automation solution Energy grid and power meters Database Data Infrastructure Information and Communication Technology (ICT) Source: Smart City Concept, Applications and Services, Telecommunications Systems & Management, March 2014 the problems of cities were solved by hardware techniques such as new construction, but smart cities provide software solutions for urban problems by collecting big data via sensors on smart platforms, analyzing big data using AI, and realizing an optimal distribution of resources. This integration and convergence taking place between construction and IT will continue to progress from the adaptation of new technology to the transformation of production structures and systems in construction. For example, 5D Building Information Modeling (BIM) and 3D printing will be applied on a commercial scale to construction. Steel materials will become stronger and lighter, and even intelligent steel materials equipped with RFID tag technology will be broadly adopted in the construction industry. A smart city has two main characteristics: digital transformation and energy revolution. From the digital transformation perspective, conventional cities can evolve into IoT-based, hyper-connected localities, bringing massive transformations to people s lifestyles. Intelligent infrastructure and automation design and engineering will be significantly advanced using AI. In terms of energy revolution, environmentally-friendly carbon-free ecological cities will emerge. Carbon-free, zero marginal cost cities with a high utilization of new and renewable energy will be further expanded. In addition, cities will be able to maximize energy efficiency by using energy storage systems (ESS) and energy circulation systems. The concept of a smart city has been evolving out of the notion of a digital city in the 1990s and ubiquitous city in the 2000s. With the rising awareness of IT innovation, energy, and the environment, the smart city has become a subject of tremendous attention. It is clear that smart cities will be rapidly expanding in the future, fueled by technological development in platform and data analysis and rising demand for urban development in emerging countries. China has recently declared the official launch of smart city projects and is advancing the sophistication of its smart cities using cutting-edge AI technology based in Google s deep learning. India has also announced 36 Asian Steel Watch

6 Future Cities and Changes in Steel Materials Figure 7. Steel Intensity of Construction Investment The emerging trends of megacities, green cities, and smart cities closely interwoven with the ongoing trend of urbanization will spark innovation in construction products and technologies Source: POSCO Research Institute, Note: Steel intensity = Steel demand for construction Construction investment a plan to construct smart cities to get its Smart Cities Mission on track. Qualitative and quantitative changes in construction steel materials In the future, the emerging trends of megacities, green cities, and smart cities closely interwoven with the ongoing trend of urbanization will spark innovation in construction products and technologies. This will require new steel products for construction as well as new materials. As societies increasingly require advanced construction products to suit emerging trends, construction steel demand will change as follows. First, conventional steel materials for construction, such as steel bar and section, will have their functionality improved to include increased strength, higher thermal conductivity, and better sound isolation. To enhance performance, they will also be developed as composite materials (i.e. composite materials made of steel bars and concrete). Second, new materials such as carbon nanotubes and shape memory alloys will be widely deployed in construction processes. The utilization of high-functional new materials in construction will allow and accelerate megatall, eco-friendly, and smart construction products. Under ongoing and emerging trends, construction investment has resulted in a qualitative diversification of steel construction materials. However, quantitative demand, or so-called steel intensity, which refers to steel demand divided by construction investment, is expected to decline. Despite urbanization, construction costs excluding steel, such as labor costs, are rising compared to the past. High-strength steel materials will be increasingly used for supertall buildings and super-long-span bridges in megacities; therefore, steel content per the unit of construction investment is expected to decline. Moreover, construction costs will be redirected to intelligent devices such as IoT and sensors in smart cities and away from steel. As a result, steel intensity (Base 2015 = 100) will gradually decline to 91 by 2025 and 84 by Vol.03 June

The 4 th Industrial Revolution and Its Impact on the Future Steel Industry and Steel Demand

OECD Steel Committee Meeting 2017 The 4 th Industrial Revolution and Its Impact on the Future Steel Industry and Steel Demand Yong-doo Cho, Ph.D. POSCO Research Institute Sep. 28, 2017 1. Introduction