Daiwa Steel Tries Pig Iron Consumption below 6%

JFE Steel’s electric furnace steel maker, Daiwa Steel expects the firm’s pig iron consumption would decrease to almost zero at Mizushima works in Okayama in August. The works’ consumption in fiscal 2011 ending in March 2012 would be lower than 6-7%, which originally expected.

The works has been purchasing pig iron and ferrous scrap from JFE Steel. However, the works’ production cost increased due to higher pig iron price from ironmaking material cost surge. The firm has been trying to reduce the pig iron consumption since 2010.

The works reduced pig iron consumption rate to about 15% of steelmaking material in fiscal 2010 from about 50% in fiscal 2009. The works planned to reduce the rate to 6-7% in fiscal 2011. The works would reduce the consumption to almost zero in August due to the effort to secure ferrous scrap from third parties and the rate in fiscal 2011 would be lower than originally expected.

Daiwa Steel gave authority to ferrous scrap purchasing professional, who has been in the business at the firm’s plant around Tokyo, also at Mizushima works. The firm also trained ferrous scrap purchasing staff and the works purchases 80-90% of ferrous scrap from third parties.