How to Make a Suitable Digital Strategy that Can Help Steel Mills?

Agile deployment of some market-proven tools and actions help steel companies to prepare them for the future large-scale digitization.

FREMONT, CA: Steel mills that prepare and distribute their products, live, and die by steel prices. These producers and distributors have shockingly limited control over the cost of their products. When steel prices get too low, it's not healthy for steel companies. Plant closings, furnace idlings, and mechanic layoffs dominated the headlines during the past years.

Best times for steel delivery are a measure of demand at the mill level. The more extended lead times stretch at the mill, the busier it gets. Except for plate, lead times for all steel products are up to a week longer than they were at this time last year, signaling healthier demand. As of mid-January, the average lead time for hot-rolled steel was nearly five weeks, cold-rolled was six and a half weeks, and for coated steels around seven weeks.

Advances in ferrous portion prices are lending support to higher finished steel prices. The price of scrap, the primary feedstock for electric arc furnaces, increased by a total of dollar 80 per ton from October 2019 through January 2020. Scrap prices typically rise as cold winter weather slows scrap collection and contracts supplies. But with relatively mild weather in the early part of the year, the primary driver of higher scrap prices has been demand from the mills. The American Iron and Steel Institute recently reported that the mill capacity utilization rates above 82 percent in January, symbolizing that steel producer have turned up production in anticipation of higher steel prices and better margins this year.

Digital technologies are transforming the world and dramatically enhancing the way how organizations work. At present, the steel and metals manufacturers face a considerable possibility to change their operational model by implementing digital technology, empowering them to promote operational efficiency, customer service, inventory levels, and also profit margin.

See also: Top Metals and Mining Technology Consulting/Services Companies