Uncertainty is now the main characteristic of the business environment. Our response to the crisis is to create agile commercial policies, to identify and mitigate all kinds of risk and to maintain our financial liquidity ~ Iosif Vangelatos
Agility and adaptability are the two main virtues for every organisation to navigate the complexity of our times. This is how Iosif Vangelatos, General Manager of Inos Balkan, explains the essence of handling the uncertain times in which we live.
How is Inos Balkan performing in 2022 and what are the main challenges that you face moving forward?
This is a very specific year for the global economy, as well as the Serbian economy and, of course, our organisation. The enormous financial stimulus that both the U.S. and the EU provided in 2021, in order to boost economic recovery in the post-COVID-19 era, created high demand for products and services. Many investment plans became feasible and found appropriate financial support, while prices of energy, metals and other commodities were spiking.
Though a lot of concern emerged among many financial analysts in terms of inflation, key policymakers around the globe were looking for the correct mixture of measures to fight inflationary pressure without killing development.
In that pre-existing context, the global economy was confronted by the consequences of the war in Ukraine. The strong dependence of the EU economy on Russian fossil fuel resources, and potential disruptions to the energy supply chain, created a new hike in prices of natural gas and petroleum.
The steelmaking industry is facing the challenge of decarbonisation. Increased public concern, growing investor interest in financing sustainable projects, as well as stricter legislative requirements on CO2 emissions, are dictating the way
Uncertainty is now the main characteristic of the business environment. Our response to the crisis is to create agile commercial policies, to identify and mitigate all kinds of risk and to maintain our financial liquidity. We are trying – always in close cooperation with our partners – to resolve all supply chain disruptions, to secure the sourcing of raw materials for our production units, while at the same time keeping a low level of inventory, in order to anticipate huge fluctuations in prices of commodities.
To what extent will the energy crisis influence the decarbonising process of the steelmaking industry?
Steel, which is maybe the most important engineering and construction material, is today present in all aspects of modern civilisation. However, we must keep in mind that, for every ton of steel produced, an average of 1.85 tons of carbon dioxide is emitted into the atmosphere, equating to about eight per cent of global carbon dioxide emissions (as per 2018 data). The steelmaking industry is facing the challenge of decarbonisation. Increased public concern, growing investor interest in financing sustainable projects, as well as stricter legislative requirements on CO2 emissions, are dictating the way.
The technological solutions available for the decarbonisation of steelmaking were shaped before the outbreak of the war in Ukraine, but the emerging energy crisis will now determine the feasibility of each method. Steel is produced either using a blast furnace (BF)/basic oxygen furnace (BOF), where iron ore is the main resource or an electric arc furnace (EAF) and in which secondary raw materials – scrap – is used.
Decarbonisation methods aim to replace carbon as a reductant (natural gas, biomass and hydrogen are the main alternatives) and thus reduce the CO2 emissions of the steelmaking process. The current increase in the price of natural gas, as well as potential disruptions in the supply of Russian natural gas, may negatively influence the steelmaking industry’s decarbonisation efforts, as many steelmakers had chosen natural gas-related methods. Nevertheless, on the other hand, the same conditions may accelerate the transition to net-zero steel production by boosting hydrogen-related or CO2 capturing investments.