Steel is a commodity with a global market and a high demand. The infra industry uses steel most frequently. Steel is more in demand as the economy expands and vice versa. Insufficient demand also results in low pricing, which force plants to close in order to balance supply and demand. Similar to this, new capacities are introduced once more to balance supply and demand when prices are high and firms are making profits that are above average. Sometimes supply exceeds demand in order to generate above-average earnings. Such a mismatch between supply and demand causes price volatility.
Nippon Steel Corp. of Japan announced on Thursday that it would begin producing low-carbon raw materials to suit the rising demand for so-called green steel. One of the main goals in the fight against climate change is to minimize carbon dioxide (CO2) emissions from the steel industry, which make up between 7% and 9% of world emissions.
Nippon Steel President Eiji Hashimoto stated during a news conference that “we would be involved in raw materials as our own business, instead of simply obtaining raw materials (such as iron ore and coking coal)”.
In order to manufacture metallic iron without melting it, the oxygen from the iron ore must be removed. Currently, natural gas is mostly used to manufacture reduced iron, but steelmakers throughout the world are attempting to make reduced iron using hydrogen in an effort to move toward a CO2-free steelmaking process.
Global crude steel production
According to World Steel Association figures released on Thursday. Global crude steel production decreased 2.6% from a year earlier in November to 139.1 million tonnes. The world’s largest producer and user of crude steel is China. It increased production by 7.3% to 74.5 million tonnes in November.
Nippon Steel, according to Hashimoto, would be interested in participating in an iron ore project. It has a hydrogen plant of its own that generates hydrogen using green electricity. When hydrogen is produced using renewable energy. Such as wind or solar electricity and put via an electrolyser. It is said to be green.
As new development projects for the coal have been dwindling. This is because of concerns about climate change. The No. 4 steelmaker in the world will continue to invest in coking coal mines. For them to obtain supplies of one of the key elements for steelmaking, according to Hashimoto.
About 20% of the company’s annual imports of coking coal and iron ore come from its ownership of shares in a number of coking and iron ore operations. Coking coal, according to Hashimoto, is still required to ensure that attempts to decarbonize the process can coexist with steelmaking.