CLF move to exploit 70% hydrogen capability in 2022 at the Toledo HBI plant is an early surprise and undoubtedly will increase HBI costs.
Auto manufacturers are looking to pursue greener inputs and are going to pay more for the steel being made.
Apparently, LG has decided the increased costs are worth it in terms of the overall bottom line. While many are talking about greener steel, CLF is rapidly moving forward at producing greener steel and doing this at large scale.
This must be good news for Midrex which has two HBI/DRI plants under construction in Russia and a third recently finished and in production. I would not be surprised to see CLF announce a second HBI plant in 2022, particularly if they are getting good results using higher HBI feed rates as Kobe Steel demonstrated in 2020. Higher HBI feeds reduce the need for coke whose price has increased 40% over the past year and represents ~1/3 of the production costs of blast furnace steel.
In addition to HBI, the stated decrease in coke use is also due to increased scrap use in BOFs, since more scrap means less hot metal is needed from blast furnaces.
