Understanding the demand for Green Steel, page-481

Nippon Steel Expands Stake in Raw Material Mines to Ensure Stable Supply and Mitigate Price Volatility (energyportal.eu)


Nippon Steel estimates that the 20% stake in Teck’s coking coal business will boost its annual profit by approximately 70-80 billion yen ($476-543 million). This increase in profit aligns with the company’s recent upward revision of its net profit forecast to 420 billion yen for the year through end-March.

Nippon Steel plans to continue mitigating risks related to price volatility by hedging liquefied natural gas (LNG) prices through long-term contracts. Nippon Steel’s ongoing efforts to expand its stake in raw material mines will ensure a stable supply and insulate the company from price fluctuations, ultimately strengthening its position in the global steel market."

Furthermore, Nippon steel, Japan’s biggest steelmaker, made their intentions clear in March 2023 that they are considering a major investment in a green steel project powered by hydrogen as a global push to decarbonise their operations by 2050. Japan’s high electricity costs present a hurdle for domestic production, prompting the company to search for opportunities outside the country. This came from Takahiro Mori, executive vice president who oversees global operations in Nippon Steel.

So they want to decatbonise their operations + want access to raw materials to reduce price volatility + have been buying up coal mines and naturak gas assets for billions of dollars + want to produce green steel + energy prices are too expensive for them to do anything domestically + natural gas will be used in interim until hydrogen is cheap in the blast furnace process. To me, they just need to secure one final recipe = high grade ore.

Oh and guess what? MGT team are now in Tokyo where Nippon Steel headquarters are. I dont know about you but I am excited. Time will tell.