Demand for steel has never been greater. At the same time, the steel industry faces many challenges over the coming years. Ovako is responding with a clear focus on sustainability and maintaining a reassuring closeness to its customers.
Anyone who wants to check the temperature of the Swedish steel industry right now should not check the figures on the stock exchange. Instead, take a look at the order books of the companies within the industry. Here it is looking very positive.
- I have rarely seen such a rapid and surprising increase in the market situation as now, and it is only expected to increase in both 2021 and 2022, says Jukka Kivelö, General Manager, Sales Unit Scandinavia, Ovako.
But that was not the case in the spring of 2020, when, as across the general society, Ovako - and the entire steel industry - was caught by surprise by the corona pandemic. Order intake fell drastically in the first two quarters and when summer arrived, things were looking really tough.
At the time, there was nothing to suggest anything other than a really tough end to 2020.
- But after the holidays, China came along and boosted the whole market. Even though China is the world's largest steel producer, it needed still needed more. So, from Q4 2020, there has been an incredible demand for steel," says Jukka Kivelö.
Global purchases have become local
A demand that has also been felt here in Sweden. Jukka Kivelö says that Ovako's order intake has exploded since the autumn of 2020 and that it is actually difficult to keep up with the pace.
- It is positive that things are picking up and that we can start hiring again. I see a bright future for a tough industry," he says.
But - yes, there is a big but - the increased demand also means that delivery times are increasing. It is true that Ovako has started hiring again after last year's short-term layoffs, but since the posts are mainly located in small rural locations in Sweden, it is difficult to find qualified workers.
- There are millions of challenges, and at the moment it is to keep the production in line with what's happening in the market. Another longer-term challenge is the logistics of our customers. If we look at the Nordic region, we see that purchases are increasingly local rather than global. The shortage of semiconductors and the blockage of the Suez Canal have made large companies reluctant to buy from someone far away from themselves. This is where Ovako can help, as we have all our production sites in Sweden and Finland," says Jukka Kivolo.
Lowest carbon emissions in the world
Ovako is the world's leading producer of specialist steel and its customers are mainly in the ball bearing, manufacturing and transport industries. All steel produced by Ovako is made from recycled steel scrap from the Nordic region and only green electricity is used in production.
- The steel industry is the world's biggest carbon dioxide producer. But if you buy from Ovako, you get scrap-based steel made using Swedish electricity. The easiest way for a customer to reduce their carbon footprint is to buy from us, says Jukka Kivelö.
That's how they communicate. That's what their message to customers will sound like when they exhibit at Elmia Subcontractor. By using recycled scrap and Swedish green electricity, Ovako's carbon emissions are 80 percent lower than the global average among the world's steel producers.
And they want to help their customers understand how their carbon footprint affects the entire value chain.
- Those who use steel in their products often have low carbon emissions themselves. The bulk comes from subcontractors. That's why we want our customers to look first and foremost at where the raw materials come from. Then they also need to look at their own emissions. This is where we take the lead and assume a great deal of responsibility on our part. So much so that major Swedish industries are asking us how they should measure emissions from other steel manufacturers," says Jukka Kivelö.
Industry of the future with challenges in competence
There is another long-term challenge too. A challenge that is hardly unique to the steel industry, but one that is highly topical right now as demand for steel reaches record highs. It is, of course, about skills development and, more specifically, getting more people to study metallurgy.
One thing is certain, Jukka Kivelö sees the steel industry as an industry of the future.
- We have been, and still are, a major industry in Sweden. It is still ore, forestry and steel that are important for Swedish exports. In other words, our base industries. But sometimes this is forgotten because the stock market values are not so high. But that's how it goes, the basic industry is incredibly strong," he says.
In so many ways, Ovako is meeting the challenges surrounding competence, sustainability and logistics at Elmia Subcontractor. Through communication at the stand and lectures to customers, they are spreading the message that steel can also be sustainable.
Additionally, Ovako also sees an opportunity to promote the steel industry to all visitors.
- We are the only steel manufacturer in the Nordic region with this type of product and it is at Elmia Subcontractor that we want to show what we have to offer. But we're not just there to meet customers, we're also there to meet students and young people, who are our potential future colleagues. That is also a vitally important type of meeting," he says.