Nippon Steel outlines operation shutdowns, zero-carbon initiative

Nippon Steel Corp. said March 5 that it intends to shut down a number of its operations across Japan due to an anticipated decrease in steel demand in the country, as outlined in the company's medium- to long-term management plan.

The Japanese steel manufacturer announced the closing of some of its steel plate mills, shape mills, pipe and tube mills, hit-dip galvanizing line and pickling line for flat products, titanium and stainless steel facilities, and upstream facilities. The company will transfer their production to other existing plants.

The affected operations include Nippon Steel's East Nippon Works, Kansai Works and Setouchi Works, and unit Nippon Steel Stainless Steel Corp.'s Kinuura Works, Yamaguchi Works and Kashima Works. The shutdowns are scheduled within fiscal 2021 through June 2026.

Meanwhile, Nippon Steel said that it will consider and implement various measures as a top priority management issue in order to surpass competitors in Europe, the U.S., China and South Korea.

The company is adopting the Nippon Steel Carbon Neutral Vision 2050 – A Challenge of Zero-Carbon Steel initiative, with a 30% reduction in carbon dioxide emissions compared to 2013 eyed by 2030.

However, the company noted that the 100% hydrogen direct reduction method of steelmaking, considered as the ultimate zero-carbon steelmaking technology, is not yet proven and needs about ¥500 billion in research and development expenses and ¥4 trillion to ¥5 trillion in facility investments. It added that it is possible that the production cost of crude steel even in the best-case scenario as of 2050, which factors in potential external conditions, will be more than double that of current costs.

Meanwhile, the company will invest ¥100 billion into its digital transformation strategy and capital expenditures of ¥2.4 billion over the next five years. The company will also invest ¥600 billion in business over the next five years in preparation for the steady promotion of ArcelorMittal Nippon Steel India capacity expansion measures and acquisition of, and equity participation in integrated steel mills in countries such as China and ASEAN countries.

The group plans to reach 100 million tons of global crude steel capacity through cooperation with its strong mother mills in Japan and mills overseas.