Japan: Nippon Steel crude steel production, steel shipments rise in FY22

Nippon Steel, Japan's leading steel producer, has recently released its financial results for the year ended 31 March 2022. The company's crude steel output and steel shipments reported a growth in FY22 compared to the previous fiscal.

Highlights

• Non-consolidated crude steel output stood at 38.68 million tonnes (mnt) in FY22, registering an increase of 17% compared to 33 mnt in the last fiscal year. However, in Q4, crude steel output dropped sharply by 9% to 8.81 mnt as against 9.64 mnt a quarter ago.
  
  
• Non-consolidated steel shipments rose by 14% to 35.56 mnt in FY22 as against 31.22 mnt seen in the corresponding period last year. On the contrary, on q-o-q basis, steel shipments saw a decline of 7% to 8.31 mnt in Q4 versus 8.96 mnt in Q3.
  
  

Despite deteriorated business environment, Nippon Steel reported its consolidated business profit at JPY 938 billion in FY22, higher from JPY 828 billion seen in FY21. During the second half of last year, steel demand recovery remained slow. However, drastic cost reduction, improved direct contract sales, and better order intakes resulted in company's high profit structure that generated JPY 600 billion underlying consolidated business profit.

Repair plans in FY23

• Nippon Steel has plans to permanently shut down the pickling line in east Nippon works, Kashima area and a galvanising and aluminising line in Setouchi works, Hanshin area (Sakai). In FY21, the steel major closed a steel plate mill in Nagoya works, the upstream facilities in the Kure area, a series of upstream facilities in Wakayama area and a titanium welded pipe production line in Kyushu works, Oita area.
  
  

Investment plans

• Nippon Steel plans an additional investment of JPY 123 billion in electrical steel sheet line in response with growing demand.
  
  
• The steel major has decided to construct a next-generation hot-strip mill in Nagoya works by Q1FY27. An investment of approximately JPY 270 billion is projected with the annual capacity of 6 mnt/year.
  
  
• In addition, the company is relining BF No.3 in Nagoya works and plans to put in place a newly constructed electric-arc furnace in Hirohata works in FY23.
  
  

Expanding global crude steel capacity to 100 mnt/year: In line with its plans of expanding its crude steel capacity to 100 mnt/year, the company accquired two integrated EAF steel mills in Thailand - G Steel and GJ Steel last fiscal. As a result, the company will enter into the Thailand market and capture growing local demand for hot-rolled steel sheets as general use.

AM/NS India downstream expansion: The joint venture between ArcelorMittal and Nippon Steel India, has decided to set up the state-of-the-art steel sheets manufacturing facilities (pickling, cold rolling, and galvanising) at its Hazira works. The production is expected to start by 2024.

Also, it has entered into partnership with southern renewable energy project and secured 250 MV of renewable energy power annually for the next 25 years for the Hazira steel plant. This will result in about 20% of the electricity requirement at Hazira steel plant coming from renewable sources, reducing carbon emissions by approximately 1.5mnt/year.