Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Nippon steel mulls to build a large electric arc furnace (EAF) with 4mn mt annual capacity in Japan by 2030, according to local media. In a briefing on environmental measures, Nippon steel’s managing executive officer Hideo Suzuki emphasized on EAFs and announced the building of a large EAF as part of Nippon’s decarbonization strategy. The location and investment for the project are yet to be planned. 


The steelmaker is hit by slow demand for steel in Japan and tough competition from Chinese counterparts in the export market. The company’s existing blast furnaces are inefficient at producing smaller volumes of steel and also need technical upgrades to meet green steelmaking standards. Nippon plans to replace them with EAFs which are comparatively more energy-efficient and also lead to lower carbon emissions due to the utilization of ferrous scrap as feed. Nippon is also developing technologies to use hydrogen instead of coke to reduce carbon dioxide emission from its steelmaking processes. The company aims to manufacture high-grade steel products through large EAF at East Nippon Works in Kimitsu City, Chiba Prefecture, according to local reports.


Japan’s largest EAF with 2.5mn mt annual capacity belongs to Tokyo steel and is located in Tahara, Aichi Prefecture. 


Earlier, the company announced its goal to reduce its global warming gas emissions to zero by 2050. Amid the lull in steel demand in Japan, Nippon is focusing on capacity expansion overseas. India is on top priority in Nippon’s expansion plan. During the management plan briefing on March 5, officials stated AM/NS India lacks capacity and they plan to raise the plant’s capacity to 14mn mt. The company also expressed its keenness to build a second steel mill on the East coast of India to cater to increasing demand. 


In the US, where overall steel demand is expected to be flat, Nippon has decided to build a new EAF at AM/NS Calvert for producing high-grade auto steel. Here, Nippon’s emphasize is on developing the technology for producing high-grade steel in EAF and then applying it across its other overseas operations. The company believes EAFs are go-to option for markets where demand is not large enough to operate blast furnace and also helps reduce the group’s carbon footprint. 

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