CLF is becoming clean blast furnace steel production play
After acquiring the vast majority of US blast furnaces for bargain basement prices; CLF has been quietly upgrading them to add capability for HBI input and for using natural gas. They will now be using all HBI from the Toledo plant internally and are upgrading a second mine with DR-grade (required for HBI plants) pellet production capability. Their recent scrap purchase was to primarily use in the BOFs connected to blast furnaces.
The use of HBI in blast furnaces is proven technology as exemplified by voestalpine steel using HBI from its Corpus Christi plant for its Austrian blast furnaces for the past several years. Kobe Steel has recently run blast furnace tests showing the viability of using up to 20% HBI as feed. As noted in earnings call, prime scrap feeds up to 25% can be used for BOFs. The combination of these two feeds reduces ore input by 1/3 and lowers emissions. The NG / HBI combination has already proven to cut coke rates by 20% and a coke oven at Middletown has already been idled.
Blast furnaces at Middletown and Indiana Harbor #7 (largest in Western Hemisphere) have been retrofitted and several others have their upgrades accelerated into 2021. Throughput rate increases on the order of 500,000 tons per year for IH7 alone are projected for what was already the nation’s most efficient steel producer.
CLF has stated that they can lower blast furnace Scope 1&2 emissions to 0.95 tons of C per ton of steel produced.
CLF is planning to use current Best Available Technology (BAT) to retrofit blast furnaces for the decade or two it will take at least to achieve economically viable full scale low emission green steel production. The combination of the Toledo HBI plant, the new scrap acquisition, and the cheaply acquired blast furnaces all indicate this strategic plan has probably been in the works for some time. It will all come together and be apparent in 2022, a year when cash flows can be used to focus on debt reduction.
