South Korean steelmaker Posco is diversifying its raw materials usage in view of achieving carbon neutrality in steel production. The objective is to minimise the use of coal and iron ore by using substitutes, as per Steel Daily
The company, which emerged as the sixth-largest steel producer globally in 2020 with a total tonnage of over 40 million tonnes (mn t), has been increasing imports of both iron scrap and hot briquetted iron (HBI). In fact, HBI imports spiralled by 218% on the year in Sep’21.
Growth in imports
- The steel major increased scrap imports from the average 100,000 t per month to 200,000 t since May this year. Of late, the company has ramped up imports of metallics such as HBI as a cushion against rising scrap prices.
- Posco imported a total of 211,043 t of HBI in the Jan-Sep’21 period –higher by more than 87% in comparison with the corresponding period of 2020. However, imports were 70,000 t lower compared to the same period of 2019.
- While HBI imports by Posco were recorded at 34,210 t in Q1CY’21, a total of 32,141 t of shipments took place in Q2. However, imported volumes surged in Q3 to more than 144,000 t, which was a whopping 218% higher, y-o-y. Imports in Sep were over 92,000 t higher than the preceding month – a monthly rise of 104%.
Until Sep, imports from Malaysia were recorded at over 158,000 t, while imports from Russia – insignificant in the past – have jumped to 51,500 t.
Cost factor
- One key reason for rising HBI imports by one of the world’s leading steel producers is the fast-increasing prices of ferrous scrap, which is integral to curbing carbon emissions in the steelmaking process. The average price of HBI imports in Sep stood at $526/t, whereas the price of seaborne scrap was $549/t.
- HBI imports in 2019 soared to 405,000 t, with the average price assessed at $301/t. On the other hand, scrap import prices by Posco stood at $327/t – $26/t higher than HBI. However, imports declined to around 160,000 t in 2020 due to worsening demand and supply conditions.
- Posco has pledged to become carbon-neutral by 2050. It plans to utilise carbon risk as an opportunity, overcoming the inevitable need for CO2 emission. Through innovative technologies, such as CCUS (carbon capture, utilisation and storage), and hydrogen metallurgy, the company aims to equip itself with “low carbon competitiveness” to produce “green steel”.
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