Japan’s Nippon Steel expects to produce about 11.60 million mt of crude steel in the July-September quarter on a consolidated basis, projecting a 36.8% year on year increase from 8.48 million mt in the 2020 quarter, the steelmaker said Aug. 3.
Non-consolidated output is similarly expected to reach 10.30 million mt for Q3, up 38.3% from 7.45 million mt the year before.
The large year-on-year increase reflects the fact that the company’s blast furnaces suspended production a year ago due to market conditions brought about by the coronavirus.
In August 2020, half of its 16 BFs were out of production, accounting for about 32% of its overall production volume. Currently, only three BFs are offline.
For the period of April-June 2021, the first quarter of its 2021-2022 financial year, Nippon Steel produced 11.88 million mt of crude steel on a consolidated basis, up 43.1% year on year.
Of this, 10.18 million mt of crude steel was produced on a non-consolidated basis, which was up 41.4% from 7.20 million mt the year before.
Summing up its latest projections for July-September, Nippon Steel expects its crude steel production for the six months ending Sept. 30, 2021, the first half of its 2021-2022 fiscal year, to total 23.50 million mt on a consolidated basis and 20.50 million mt on a non-consolidated basis.
Nippon Steel also reiterated its forecast of producing 46 million mt of crude steel on a consolidated basis for the whole fiscal year ending March 31, 2022, an increase of 22% from FY2020-2021.
It expects domestic steel demand to recover to 56.5 million mt for the current fiscal year, close to the 59.1 million mt recorded for the year ended March 31, 2020, before the COVID-19 pandemic.
Citing higher prices for steel, Nippon Steel also swung to a net profit of Yen 172.3 billion ($1.58 billion) for Q2 versus a net loss of Yen 41.4 billion the year before.
Overseas, Nippon Steel reiterated its plans to double the production capacity of its ArcelorMittal Nippon Steel India venture (AM/NS India) to 14 million mt/year while a new 1.5 million mt/year electric arc furnace at its AM/NS Calvert venture in Alabama will be completed in the first half of FY2022-23. Currently AM/NS India is undergoing debottlenecking to boost output to 8.4 million mt/year from 7 million mt/year.
The company anticipates record-high profits from its overseas business, citing robust steel demand and its withdrawal from unprofitable businesses in Malaysia, China, the US and Brazil since FY2019-2020.
Emphasizing carbon neutrality
On its goal to be carbon-neutral by 2050, the steelmaker plans to cut its carbon dioxide emissions down to 70 million mt/year by 2030 from its 91 million mt in 2019.
It plans to achieve its “Vision 2050” goal through a mixture of mass-production of high-grade steel in large EAFs, 100% hydrogen use in the direct reduction process, higher use of scrap, and using carbon capture, utilization and storage, or CCUS, technologies.
It cited factors that may hinder its progress, such as huge costs stemming from research and development, sizeable capex for implementation, and an increase to operational costs, and stated that government level support would be required to achieve zero-carbon steel, in terms of R&D, and the development of infrastructure for large scale hydrogen and carbon-free power supplies.
Policy would also need help the Japanese steel industry secure equal-footing amid international competition, as Japan pushes for net-zero carbon production.
On July 27, Nippon Steel said it succeeded in developing a process to produce polycarbonate diols from carbon dioxide without the need for dehydrating agents by using a catalytic process it developed with Osaka City University and Tohoku University. The process can be applied to “the synthesis of carbonates, carbamates, and ureas, which are useful additives for lithium-ion batteries and/or raw materials for polymer synthesis.”
— Clement Choo, Samuel Chin