Japan: JFE Steel to start large-scale EAF to produce high-grade steel by FY27

JFE Steel, one of Japan's leading steelmakers, plans to start operations of a large-scale electric arc furnace at its Kurashiki works in Okayama Prefecture by the end of FY'27. The company aims to produce 2 million tonnes (mnt) of high-grade steel annually, with half of the raw material being direct reduced iron. This is a significant step for JFE Steel, as it will be the world's first attempt to manufacture high-grade steel using a large-scale electric arc furnace with reduced iron.

During an online IR briefing, President Yoshihisa Kitano announced the company's plan to commence operations within FY'27. While the organisational structure remains undecided, President Kitano estimated the investment for the electric arc furnace project to reach "four-digit billion yen." He also emphasised the need for government support, not only in terms of the investment amount but also for operational costs.

The company has set a goal of reducing carbon dioxide (CO2) emissions by at least 30% by FY'30 compared to FY'13. The introduction of large-scale electric furnaces in Kurashiki represents a significant step in the company's global warming mitigation strategy.

The large electric furnace will be installed to replace the Kurashiki No. 2 blast furnace, which is scheduled to be replaced around FY'25. This furnace will have an internal volume of 4,100 cubic metres. Once the electric arc furnace is operational, the converter furnace equipment used to produce high-quality steel materials like electrical steel sheets will be suspended.

The scale of the electric furnace is assumed to be 300 t per charge. While there are existing electric furnaces of this size, President Kitano said, "There are only examples of general-purpose steel products being produced using steel scrap as a raw material". This new furnace, on the other hand, will be the world's first attempt to make high-grade steel using reduced iron.

The reduced iron used as a raw material will be purchased from projects currently under consideration for commercialisation in the United Arab Emirates (UAE). JFE Steel is in talks with potential suppliers to procure 1 mnt of reduced iron per year.

JFE Steel is also promoting an innovative technology research and development project utilising the government's Green Innovation (GI) fund. In addition to large-scale electric furnaces, the project aims to put into practical use carbon-recycling blast furnaces and hydrogen reduced iron production.

President Kitano stated that the development hurdles for high-grade steel production in large electric arc furnaces are relatively low compared to other methods and indicated that the company will aim to put it into practical use ahead of operations in FY'27.

The introduction of large-scale electric arc furnaces will require the development of supporting infrastructure, including power grids and raw material storage facilities, which will demand significant capital investment. Additionally, the altered energy balance of the entire steel mill will inevitably lead to increased operating costs, such as higher energy procurement expenses and the burden of acquiring reduced iron. To address these rising operational costs, Kitano advocated for government support, citing examples from other countries.

In September 2023, JFE Steel discontinued blast furnace operations at its East Japan Works in the Keihin region (Kawasaki City). Currently, the company operates seven blast furnaces. Following FY'30, the Fukuyama No. 5 blast furnace and the Fukuyama No. 4 blast furnace (both located at the West Japan Steel Works) will require replacement.

Regarding future capital investments beyond the Kurashiki project in FY'27, Kitano stated that the decision will hinge on the advancements in technological developments that utilise existing blast furnaces, such as carbon recycling blast furnaces. He emphasised that the choice between retaining blast furnaces or converting them to electric furnaces is a matter that will require careful consideration in the future.

He also expressed his preference for utilising blast furnaces if the upstream equipment of the steel mill is renewed, as it would necessitate the reconstruction of an efficient ecosystem. However, he acknowledged the importance of CCS and other technologies in achieving this goal.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.