Japan’s Kobelco to shut basic oxygen furnace, build EAF

Japan's Kobe Steel (Kobelco) will close one of the two basic oxygen furnaces (BOFs) at its Kakogawa steel works, looking to replace it with an electric arc furnace (EAF).

Kobelco will invest ¥300bn ($1.9bn) to accelerate reducing greenhouse gas emissions by introducing a new EAF, the company said on 20 May as part of its mid-term strategy for the 2024-26 fiscal years. This will result in a closure of a BOF at Kakogawa. It will finalise the decision for introducing an EAF in the early part of its 2024-26 mid-term strategy period, Kobelco said, aiming to start producing crude steel with scrap metal sometime during the 2030s.

Kobelco produced 5.9mn t of crude steel during the 2023-24 fiscal year ending 31 March, down by 3.5pc from the previous year. It forecasts producing around 6mn t during 2024-25, according to data separately announced by Kobelco on 9 May. The company did not disclose the production of each BOF at Kakogawa.

This is the latest major Japanese steel firm that specialises in BOF production to announce proposed EAF operations, following Nippon Steel and JFE. Nippon Steel started commercial operations in 2022, while JFE plans to start in 2027.

Kobelco's switch to EAF production will lead to further concerns about scarcity of scrap in Japan. The supply shortage could be as high as 5mn t in 2030 and 11mn t in 2050, according to a 2022 report by the country's trade and industry ministry.

By Yusuke Maekawa