BlueScope’s profit surge amid sharper focus on climate change

BlueScope Steel’s profits have surged in the first half of the financial year with steel volumes and spreads in its major markets at their highest level in a decade.

The company reported underlying earnings before interest and tax (EBIT) up 75 per cent on the previous corresponding period to $530.6 million.

Australian earnings were up 103 per cent, Asia and North America building products up 87 per cent, buildings North America up 189 per cent, and New Zealand and the Pacific up 300 per cent.

Only BlueScope North Star in the US, which is in the midst of adding 800,000 tonnes per annum of steel making capacity, reported a lower segment profit for the six months.

In an announcement the company said it had appointed Gretta Stephens as Chief Executive Climate Change.

In a related move looking to decarbonising future steel production, the company is considering reopening the mothballed number six blast furnace at Port Kembla at a cost of $800 million.

CEO Mark Vassella said: “In recent years we have built climate change into our corporate strategy, recognising that addressing climate change is essential to our long-term success and have publicly stated our commitment to taking action on carbon emissions.

“We are now formalising that approach.”

Vassella said future steel making would be centred on breakthrough technologies including using hydrogen and electrolysis.

“These technologies are currently in early stages of technology readiness with significant advances expected to occur over the next decade.

“…In the shorter term, the steel sector will need to rely on technology performance improvements.”

These could include optimising raw material mixes, reusing waste heat and gases, replacing coal with biomass and hydrogen, increasing scrap usage and greater use of renewable energy.

The technology landscape meant the company is considering options for its Port Kembla Steelworks where the number five blast furnace would come to the end of its current ‘operating campaign’ in the late 2020s.

BlueScope told investors: “Given the critical nature of iron making to the Port Kembla operations, to safeguard supply, an alternative source of iron may need to be available from 2026.

“…Emerging green steel technologies, whilst promising, are not yet ready for large scale implementation in the timeframes required.”

BlueScope has earmarked $10 million for preliminary studies with an initial focus the relining of the mothballed number six blast furnace.

The company estimates capital investment of up to $800 million would be required.

Picture: BlueScope Steel

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