Production and Technology of Iron and Steel in Japan during 2018

1. Overview of the Japanese Iron and Steel Industry

Reviewing the significant events related to global economy in 2018, the United States imposed import restrictions in March on steel and aluminum under Section 232 of the Trade Expansion Act, resulting in a further worsening trade friction between the US and China. In November, the European Union formally decided the terms of the Withdrawal Agreement establishing the conditions for Great Britain’s withdrawal from the EU (“Brexit”), and we had to focus on so-called protectionist trends, such as the rejection of that proposal by the British Parliament at the beginning of this year. Although fears for the effects of this kind of trade friction and related factors gave rise to feelings of economic stagnation in Europe and China, the overall tone of the global economy was firm. In Japan, 2018 was year of repeated natural disasters, including record-breaking heavy rains in western Japan in July and the large typhoon No. 21 (Typhoon Jebi) that crossed Shikoku and the Kinki region in September, and was followed in the same month by the Hokkaido Eastern Iburi Earthquake, which had its epicenter in the Iburi region of Hokkaido and registered a seismic intensity of 7, the highest on Japan’s seismic intensity scale. These natural disasters were accompanied by extremely severe damage and also affected the operation of nearby steel works. Influenced by these natural disasters, Japan’s industrial production index was stagnant in the 3rd quarter, but then recovered to the year’s highest level in the 4th quarter as recovery from the disasters progressed. Moreover, employment conditions in Japan improved steadily, with both the complete unemployment rate and the ratio of job openings to applicants continuing to show improving trends. A moderate recovering trend continued in the Japanese economy, and a real GDP growth rate of around 0.9% was forecast for fiscal year 2018. Although this is a moderate growth rate in comparison with the Japan’s Izanagi Boom of 1965–1970 (real GDP growth rate 11.5%) and the bubble economy of the late 1980s (5.4%), it is considered possible that this will become the longest period of economic recovery of the post-war era.^1,2,3,4)

In the world steel industry, movements in China and India were a distinctive feature of 2018. Although excess production capacity has been a problem in China for several years, the Global Forum on Steel Excess Capacity (GFSEC) was established by the G20 countries in 2016 to deal with this issue. The First Ministerial Meeting of the GFSEC was held in November 2017, followed by the Second Ministerial Meeting in September of 2018, and efforts to eliminate excess steel capacity in all countries were made through these meetings. In China as well, the government is promoting a plan to reduce crude steel production capacity, and as part of these efforts, illegal operations, represented by ditaiogang (inferior quality induction furnace steel), are to be eliminated completely. On the other hand, while there was a spreading feeling of stagnation in the auto industry and other steel-consuming industries in the second half of 2018 due to the effects of US-China trade friction, domestic demand in China had displayed a firm tone until then, and as a result, China’s crude steel production reached a historic high of 928.26 million tons in 2018. Crude steel production had been essentially flat at roughly 800 million tons in 2015 and 2016, but thanks to the adjustment of excess production capacity and expansion of domestic demand, production grew once again and achieved a level exceeding 900 million tons. India continued to maintain a high real GDP growth rate of more than 7% per year, supported by the public sector, including government spending, and gross fixed capital formation, and because steel demand also increased, crude steel production in 2018 rose to 106.46 million tons, which ranked 2nd in the world and exceeded Japan’s crude steel production (104.33 million tons in 2018) for the first time. Reflecting these trends, world crude steel production in 2018 reached 1808.61 million tons, exceeding 1800 million tons for the first time (Table 1).⁵⁾

Table 1. Top 10 crude steel production countries (Source: WSA; Unit: 1000 metric tons).⁵⁾

Next, turning to trends in the iron and steel industry in Japan, although the Japanese economy as a whole experienced a temporary stagnation due to the effects of the natural disasters that occurred around mid-year, there is now a basic tone of gradual recovery together with recovery from those disasters. In steel-consuming industries, while an adequate return to form could not be seen in the building construction field in the construction market and in the shipbuilding field in manufacturing industries, the trends were generally firm in other fields. Demand for urban development in the runup to the 2020 Tokyo Olympics and Paralympics showed an increasing trend from two years ago and peaked in 2018. On the other hand, particularly among integrated steel makers, problems with production equipment could be seen here and there, and this also affected crude steel production. Reflecting these conditions, Japan’s crude steel production for 2018 (calendar) was 104.33 million tons, which was on roughly the same level (0.3% decrease) as the 104.66 million tons of the previous year (Fig. 1).⁶⁾ Concerning trends in raw materials for steel production, because there were no large problems on the supply side, the import prices of iron ore and metallurgical coal did not fluctuate greatly and price trends were generally stable. On the other hand, sharp increases in the prices of materials such as ferroalloys, refractories, and electrodes, were reported, affected by production trends in China and elsewhere, among other factors.

Fig. 1.

Transition of crude steel production in Japan (calendar year).⁶⁾

As distinctive topics related to iron and steel technologies in 2018, efforts in the area of global warming countermeasures and the response to advanced IT technology can be mentioned. Where global warming countermeasures are concerned, although the steel industry has grappled earnestly with this issue up to the present, as a response to the Paris Agreement, the Japan Iron and Steel Federation (JISF) established a new long-term strategy that looks ahead to the year 2030 and beyond, called “JISF Long-term vision for climate change mitigation: A challenge toward Zero-carbon Steel.” Moreover, with IT technology progressing year by year, all major steel companies have established new departments focused exclusively on IT and are accelerating efforts for practical application in order to apply new IT technologies to production sites and research and development.

One notable trend in the steel industry was large moves in industrial reorganization. In May, Nippon Steel & Sumitomo Metal Corporation (NSSMC, see the footnote in p. 939) made Nisshin Steel Co., Ltd. a wholly-owned subsidiary, and will consolidate the stainless steel sheet business of the NSSMC and Nisshin Steel Co., Ltd. with Nippon Steel & Sumikin Stainless Steel Corporation. After acquiring the Swedish specialty steel maker Ovako AB as a wholly-owned subsidiary in June, NSSMC also concluded an agreement in August under which Sanyo Special Steel Co., Ltd. will become a subsidiary, and is promoting measures to strengthen its special steel business by the three companies.

All major Japanese steel makers are also fully involved in promoting overseas strategies. In particular, NSSMC decided on a policy under which it will acquire India’s Essar Steel together with ArcelorMittal. JFE Steel Corporation constructed a plant that will produce hot-dip galvanized steel sheet and prepainted steel sheet for building materials in Myanmar and started operation of a segregation-free premixed iron powder plant in China, and Kobe Steel, Ltd. increased the capacity of its secondary processing plant for wire rod material in China.

In order to clarifying conditions surrounding the Japanese iron and steel industry in 2018, the following presents an overview of the trends in raw materials for iron and steel, trends in steel-consuming industries, and the condition of crude steel production in Japan and the world.

*  The footnote: Nippon Steel & Sumitomo Metal Corporation is denoted as Current: Nippon Steel Corporation, Nippon Steel & Sumikin Stainless Steel Corporation as Current: Nippon Steel Stainless Steel Corporation and Nisshin Steel Co., Ltd. as Current: Nippon Steel Nisshin Co., Ltd. (Name changes are effective April 1, 2019.)

1.1. Trends in Raw Materials for Iron and Steel

According to announcements by the three iron ore majors (Vale, Rio Tinto and BHP Billiton), the basic tone of increasing production of iron ore continued in 2018, and production remained on record high levels at all three companies.^7,8,9) However, raw material prices remained flat due to increased pig iron production worldwide. According to the contractual iron ore prices announced by steel makers, the price of iron ore rose from 2017, peaked in the 2nd quarter of that year, and then declined to the level at the beginning of the year. In spite of a slight increase in the 2nd quarter of 2018, prices were on the same level as in 2017, as price fluctuations were with in the range between the highest and lowest prices of 2017. Although the market condition saw repeated rises and falls through 2018, changes in price were limited to the range observed during 2017.^10,11)

Metallurgical coal was also affected by the tone of increasing pig iron production worldwide, and the supply-demand relationship was similar to that for iron ore.¹²⁾ According to announcements by steel makers, the unit contractual price of metallurgical coal increased sharply after October 2016. As the market condition for metallurgical coal during 2017, the year saw repeated price increases and decreases.^10,11) While prices also continued to rise and fall during 2018, the range between the highest and lowest prices was smaller than that during 2017. Figure 2 shows the transition of world pig iron production and the unit prices of imported iron ore and metallurgical coal.¹³⁾ The highest prices had been US＄167/t for iron ore and US＄229/t for metallurgical coal in 2011, but declined to US＄56.70/t for iron ore and US＄90.10/t for metallurgical coal in 2016. Subsequently, the price of iron ore rose to US＄76.20/t in 2017, affected by increasing pig iron production from 2017 onward, and was basically flat at US＄75.30/t in 2018. On the other hand, the price of metallurgical coal rose to US＄149.70/t in 2017 and then increased further, to US＄158.20/t, in 2018.

Fig. 2.

Transition of world pig iron production and unit price of imported iron ore & metallurgical coal (calendar year).¹³⁾

1.2. Trends in Steel-consuming Industries

Referring to the Quarterly Report of Iron and Steel Supply and Demand¹⁴⁾ of the Japan Iron and Steel Federation and the websites of the Japan Automobile Manufacturers Association, Shipbuilders Association of Japan, and Japan Electrical Manufacturers Association, the trends in steel-consuming industries were briefly described below. For details, please refer to the original Japanese text or the websites of the JISF, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the respective industrial associations.

[Civil engineering] In the civil engineering sector in FY 2018, in spite of the outlook for an increase in private-sector civil engineering works, total demand is expected to fall below FY 2017 due to downward pressure caused by a decline in public civil works. As a result of a decrease in public works-related expenditures from FY 2017, including carry-over from the previous year, due to the reaction from the high level demand associated with earthquake-related measures, the value of orders received for public civil works is expected to fall below the previous year. However, the level of orders itself will nevertheless trend at a high level. On the other hand, the value of orders received for private-sector civil works is expected to increase from the previous year, raised by construction of the Tokyo-Gaikan Expressway and urban redevelopment for the Tokyo Olympics and Paralympics, as well as increased capital investment by major private railways.

[Construction] In the construction sector in FY 2018, although non-residential construction has increased for 3 consecutive years, a decline in overall demand is foreseen for the first time in 3 years, as demand for residential construction decreased for the second straight year. Among factors affecting residential construction, in addition to a decrease in the effect of low-interest housing loans for owner-occupied housing, the surge in demand ahead of the consumption tax increase is expected to be smaller than that before the last consumption tax increase. In the case of rental housing, in addition to a slowdown in the effect of construction as a strategy to reduce inheritance taxes under the revised Inheritance Tax Act, which took effect in January 2015, a decreasing tendency is continuing, in part also due to strengthening of oversight of financial institutions by the Financial Services Agency. Thus, a decrease in residential demand from the previous year appears to be unavoidable. In nonresidential construction, steel consumption is expected to exceed that in the previous fiscal year, supported by increased factory construction for modernization of aging equipment and rationalization of production made possible by improved corporate profits, particularly in exporting companies, as well as demand for logistics facilities, including for public utilities.

[Shipbuilding] In the shipbuilding field, there was a reaction from FY 2016, which saw a large decrease in orders received due to more stringent exhaust gas regulations, and shipbuilding orders have gradually recovered. However, as in the past, the shipbuilding market continues to be affected by an oversupply of ships, and sluggishness also exists in shipping markets. As a result, this recovery has not led to a full-scale recovery in orders and construction. Moreover, acceptance of low-price orders by the main shipbuilding nations has also become a factor preventing a recovery of supply-and-demand conditions. China takes advantage of its low labor costs, while Korean shipbuilders accept low cost orders supported by massive public financial subsidies for Daewoo Shipbuilding & Marine Engineering by the Korean government. (It may be noted that the Japanese government asked the Korean government to begin bilateral consultations on the subsidy issue in November 2018 based on the WTO’s dispute resolution mechanism.) Because orders received in FY 2018 are expected to be limited to the same level as in the previous year and construction is being carried out while drawing out work in hand, results are expected to trend at a lower level than in the previous year.

[Automobiles] Domestic sales in FY 2018 increased very slightly, affected by the completion inspection problem which occurred during the previous fiscal year, and the appearance of the effect of introduction of new models in the second half of the fiscal year.¹⁵⁾ In exports of complete automobiles, although a downturn could be seen in the North American market, a modest increase is foreseen due to the favorable tone in exports of Japanese automobiles to Asian markets. According to the Japanese Automobile Manufacturers Association, unit production of 4-wheel vehicles in 2018 was 9728528, which was an increase of 37854 units, or about 0.4%, in comparison with the 9690674 units of the previous year.¹⁶⁾

[Industrial machinery] Looking at industrial machinery production activities in FY 2018, domestic demand for construction machinery, internal combustion engines, transportation equipment and certain other categories dropped sharply because of the high level in the first half of FY 2017, which was attributed to a surge in demand before exhaust gas regulation transitional measures. However, external demand increased due to strong demand for exports to Europe and the United States. Sales of metal processing and machine tools are also expected to increase, esp. in exports due to a large increase in shipments, particularly to China, as well as growth in Europe and North America, owning to the favorable tone in the world economy. Because demand for chemical equipment, transportation machinery, and other types of machinery also exceeded that in FY 2017, industrial machinery as a whole is expected to exceed the results of the previous fiscal year.

[Electrical machinery] Among the trends in electrical machinery in FY 2018, although items for coal-fired thermal power plants had been stagnant due to concern about environmental problems, a firm tone could be seen in heavy electrical equipment due to the strong trend in capital investment in Japan and other countries. There was also a strong tone in home electrical appliances, supported by the continuing tendency to make replacement purchases to acquire higher value-added products, together with increased production of room air-conditioners due to the extremely hot weather. In consumer electronics, demand for car navigation systems was firm, accompanying increased automobile production, and as a result, demand in this category increased slightly from the previous fiscal year. Telecommunications equipment and industrial electronic equipment as a whole trended on a high level, in spite of a lull in the market in telecommunications equipment, thanks to a high level in industrial electronics. As a result, steel consumption in the electrical machinery sector as a whole is expected to be on the same level as in the previous fiscal year, when consumption was on a high level.

1.3. Crude Steel Production in Japan

Crude steel production in Japan in 2018 (calendar year) was 104.33 million tons, which was a decrease of 0.3% from the 104.66 million tons of the previous year. Although crude steel production exceeded 110 million tons in 2014, a declining tendency has continued since that time. Japan kept the 100 million ton level in 2018, but production nevertheless fell below the results of the previous year for the fourth consecutive year. According to information provided by steel companies, the main cause of the decrease in 2018 was a decrease in the equipment operating rate due to natural disasters and equipment problems. By furnace type, converter steel production was 78.23 million tons (decrease of 1.4% from previous year) and electric furnace steel production was 26.98 million (increase of 3.1% from previous year), and the ratio of electric furnace steel was 25.0% (increase of 0.8% from previous year) (Fig. 1).⁶⁾ By steel type, production of plain carbon steel was 78.58 million tons (decrease of 1.1% from previous year), while production of special steel was 25.36 million tons (increase of 2.0% from previous year) (Fig. 3).⁶⁾

Fig. 3.

Crude steel production and continuous casting ratio for ordinary steel and special steel in Japan.⁶⁾

The Japan Iron and Steel Federation has published its Forecast of Iron and Steel Demand for FY 2019.¹⁷⁾ According to that forecast, domestic iron and steel demand is seen as decreasing from the previous year, affected by the completion of one round of investment and the consumption tax increase during 2019. In the construction industry, a continuing decrease in rental housing is foreseen in building construction, and nonresidential construction will also decrease in reaction from the high level of the previous year. In civil construction, on the other hand, an increase is expected, supported by expanded investment in public works. Since the increase in civil construction is expected to outweigh the decrease in building construction, a slight increase in comparison with the previous year is forecast in construction as a whole. In manufacturing industries, the effects of trade friction between the United States and China are expected to cast a cloud on this sector, including industrial machinery which had enjoyed a firm tone until now. The demand for automobiles, which have the largest weight in this sector, is also expected to cause a decline due to the consumption tax increase, in addition to the US-China trade friction. As a result, demand in manufacturing industries as a whole is expected to fall below the previous year. According to worldsteel (World Steel Association, WSA), world iron and steel demand in 2019 is forecast to increase by a small margin from the previous year, and iron and steel exports from Japan are expected to exceed those in FY 2018. On the other hand, it is assumed that iron and steel imports will be on the same level as in FY 2018. Thus, on balance, crude steel production in Japan is expected to slightly exceed that in FY 2018. However, trends in US-China trade friction and in China, ASEAN and other emerging economies will require close attention.

1.4. World Crude Steel Production

According to WSA, world crude steel production in 2018 calendar year was 1808.61 million tons, representing an increase of 4.6% in comparison with the 1729.82 of the previous year.⁵⁾ In 2015, world crude steel production declined in comparison with the previous year for the first time in 6 years as a result of a decrease in production in China, which had continued to increase until that year. World crude steel production remained essentially flat in 2016, but turned to increase from 2017 and increased substantially in 2018. Looking at a production in the main steel-producing countries, production in China reached 922.64 million tons, for an increase of 6.6% from the previous year, while production in Japan was 104.33 million tons, down 0.3% from the previous year, and India increased its crude steel production to 106.46 million tons, surpassing Japan to become the world’s No. 2 crude steel-producing country. Moreover, a continuing increasing trend is a distinctive feature (Table 1). Among the top 10 countries, crude steel production increased in all countries except Japan and Germany. On the other hand, according to a survey by the OECD, world crude steel production capacity reportedly showed a declining tendency, decreasing to an annual production capacity of 2251.20 million in 2017 after peaking at 2333.60 million tons in 2015,¹⁸⁾ and it is estimated that the equipment operating rate improved in 2018.

2. Technology and Equipment

2.1. Technical Environment of the Japanese Iron and Steel Industry

In 2015, the Ministry of Economy, Trade and Industry (METI) compiled “Plans on Competitiveness Improvement of Metallic Materials” as a policy for strengthening the competitiveness of the metallic materials industry, and proposed three strategies: I. Strategy for technology development, II. Strategy for strengthening domestic manufacturing infrastructure and III. Global strategy.¹⁹⁾ In this plan, the following were mentioned as issues confronting the metallic materials industry: i) Sophistication and diversification of user needs for materials, ii) Threat of competitors overseas catching up, iii) Decrease of domestic demand, and limiting factors in business, such as energy and environmental restrictions, and human resource and equipment restrictions and iv) Impact of digitalization. As directions for technology development in I., the strategy presents development of material design technologies, development of manufacturing technologies, development of analysis and evaluation techniques, training of human resources, preventive maintenance utilizing digital data, development of effective utilization technologies for resources and energy and development of materials considering environmental loads. For strengthening domestic manufacturing infrastructure in II., the strategies include prevention of industrial accidents, strengthening of competitiveness by business reorganization, response to energy and environmental problems and response to the impact of digitalization. As one item of III. Global strategy, the plan mentions resource circulation, including recycling, as a response to raw material supply risks. All major Japanese steel makers are also promoting technical development and introduction of equipment in line with these directions and issues.

Recently, digitalization and networks have spread rapidly at the global scale. Science and technology such as the Internet of Things (IoT), artificial intelligence (AI), sensors, biometric authentication, and robotics, are progressing, and technological development utilizing those achievements is being promoted, centering on the monodzukuri (Japanese-style manufacturing) field. With efforts toward the realization of the world’s first “super smart society” as “Society 5.0,” Japan’s 5th Science and Technology Basic Plan aims to create future industries and achieve social transformation by ensuring that the results of science and technology permeate all fields and regions. In line with the progressive fusion of “information space” (cyber) and “real space” (physical), which also extends to “psychological space” (brain, etc.), the acquisition, fusion, analysis and platforming of information and data in cyberspace has become essential. Under this background, each of the major integrated steel makers has established new departments that will focus exclusively on application of AI to operation at production sites, equipment maintenance, R&D and product development, and is working toward practical application.

Regarding global warming countermeasures, following the ratification of the Paris Agreement, implementation guidelines were in agreement and full-scale operation is to begin in 2020. In Japan, the Japan Iron and Steel Federation established a strategy that looks ahead to the 2030 and the years beyond, “JISF Long-term vision for climate change mitigation: A challenge toward Zero-carbon Steel.” Among efforts related to global warming countermeasures, research and development of revolutionary new technologies, and not simply a further extension of conventional technologies, is desired. Under this background, the Japanese steel industry is steadily promoting the development of products that answer user needs, for example, development of ultra-high strength steel with high formability, to meet increasing competition between materials, while also continuing to consider cooperation between materials by pursuing new value based on combinations of different materials. The following introduces the main trends in technology and technical topics at the Sustaining Member companies of the ISIJ by field of iron and steel technology.

2.2. Iron-making

Pig iron production in calendar year 2018 was 77.73 million tons, or a decrease of 1.3% in comparison with the 78.33 million tons of 2017.²⁰⁾ As of the end of 2018, 25 blast furnaces were in operation, which was unchanged from the end of the previous year. The number of blast furnaces with inner volume of 5000 m³ or larger was unchanged at 14. Average productivity was flat, at 1.88 ton/m³/day, and was also unchanged from 2017. As the reason why productivity was the same at a decreased level of pig iron production, productivity was affected by the shutdown of the Kobe Works No. 3 BF in November 2017.

In the iron-making field, construction for equipment improvement continued, beginning with repairs of aged coke ovens. At NSSMC, following expansion of Kashima No. 1 coke oven F battery and No. 2 coke oven E battery and repairs of Kimitsu No. 4 coke oven A and B batteries and No. 5 coke oven A battery (work in progress in 2018) and B battery (work completed in 2018), the company began repairs of No. 5 West coke oven battery at Hokkai Iron and Coke Corporation (now Nippon Steel Muroran Works) and also announced a modernization plan for Nagoya Works No. 3 coke oven battery.

JFE Steel plans to carry out: at West Japan Works (Kurashiki) an expansion of No. 6 coke oven B battery and repairs of No. 1 coke oven A battery, No. 3 coke oven A and B batteries, and No. 2 coke oven A and B batteries; at East Japan Works (Chiba) repairs of No. 6 coke oven A and B batteries; and, at West Japan Works (Fukuyama) repairs at No. 3 coke oven A and B batteries. The company also decided to carry out repairs at East Japan Works (Chiba) No. 7 coke oven battery by the hot brickwork replacement method and to shut down No. 5 coke oven battery due to excess production.²¹⁾

In iron-making pretreatment processes, JFE Steel announced a renovation plan under which it will extend the length of the sinter machine at East Japan Works (Keihin), which will follow the previously-announced expansion and renovation of No. 3 sinter plant at West Japan Works (Fukuyama). The pilot plant for production of ferrocoke equipment at West Japan Works (Fukuyama) is currently under construction.¹¹⁾

Regarding blast furnaces, NSSMC announced plans to reline Muroran Works No. 2 BF, and to shut down Wakayama Works No. 2 BF and start up No. 5 BF in February 2019. Nisshin Steel announced plans to expand and reline Kure Works No. 1 BF by around 2023 and shut down No. 2 BF after the relining of No. 1 BF.¹⁰⁾

As an example of development results that have won public recognition, JFE Steel’s “Development of Steel Making Raw Material Production Process Suitable for CO₂ Emission Reduction (Super-SINTER)” received the FY 2018 Commendation for Science and Technology of the Minister of Ministry of Education, Culture, Sports, Science and Technology (MEXT), Development Category in the Science and Technology Field, as well as the 7th Monodzukuri Nippon Grand Award Prime Minister’s Prize. JFE Steel also received the Director-General’s Award, Agency of Natural Resources and Energy in the Energy Efficient Machinery Award from the Japan Machinery Foundation for its “Two-stage combustion system jet burner for sinter machine ignition.”

2.3. Steelmaking

Crude steel production in Japan during calendar year 2018 was 104.33 million tons, or a decrease of 0.3% in comparison with the 104.66 million tons of 2017 (Fig. 1).⁶⁾ According to information provided by steel companies, the main cause of the decrease in 2018 was a decrease in equipment operating rates due to natural disasters and equipment problems.

As a trend in the introduction of new equipment, Nakayama Steel Products Co., Ltd. installed an electric furnace scrap preheating system in August 2018. Among equipment consolidation moves, NSSMC announced plans to shut down the steelmaking shop at Nippon Steel & Sumikin Shapes Steel Corporation (now Nippon Steel Structual Shapes Stainless Steel Corporation) at the end of FY 2019 accompanying the startup of Wakayama Works No. 2 BF.¹⁰⁾ At JFE Steel, construction of a new continuous casting machine is currently underway at West Japan Works (Kurashiki).¹¹⁾

The sharp rise in global raw material prices is also said to affect steelmaking costs. Because supplies of magnesia and other important raw materials decreased due to restrictions in China, the price of Mg-based refractories increased in 2017 and remained high in 2018.¹⁰⁾ In electric furnace steelmaking, the price of electrodes increased sharply. According to electrode manufacturers, this was caused by increased demand for electrodes for electric furnace steelmaking and a tight supply of needle coke, which is used as a raw material.²²⁾ As a result, it is estimated that production costs increased in the steelmaking process.

As an example of development results which are publicly known in society, NSSMC received the Okochi Memorial Foundation Special Production Award in the 64th Okochi Awards in FY 2017 for a “Resource-saving, environmentally friendly, high productivity stainless steelmaking process.” In this development, an alloy melting furnace process is combined with the converter process, and this enables complete recycling of chrome-containing scrap, dust, scale and converter slag, as well as chrome-containing slag purchased from outside sources, which is not only environment-friendly, but also improves productivity and reduces costs.

2.4. Steel Products

2.4.1. Sheets

NSSMC is promoting an expansion of applicable high tensile strength steel sheets for automotive parts. In a new model produced by Honda Motor Co., Ltd., a 1180 MPa high-strength cold-rolled steel sheet was applied to the outer panel part of the center pillar, and a high-hole with high hole expansion 980 MPa high-strength cold-rolled steel sheet with high hole expansion was applied to a frame part (front side frame), contributing to weight reduction and high stiffness of the automobile body. NSSMC also developed a 980 MPa high strength steel sheet with formability equal to that of 590 MPa high strength steel sheets; this product satisfies both high strength and high formability by optimization of the metal microstructure and has been adopted in frame parts of a new model produced by Nissan Motor Co., Ltd. In a joint project with the can maker Toyo Seikan Co., Ltd., NSSMC developed a steel can for 185 g use, which is the lightest in the industry. In the developed can, the thickness of the steel sheet before can-making was reduced to 0.170 mm in order to achieve this weight reduction. As the thickness of steel sheets is reduced, cans are prone to fracture during can-making because the material is more easily affected by inclusions in the steel sheet. NSSMC developed a new steel sheet with high workability by enhancing its technology for reducing inclusions in steel.

JFE Steel developed a high lubricity hot-dip Zn-coated automotive steel sheet (GI) that dramatically improves press formability. The modified layer formed by modification of the outermost layer of the Zn coating successfully reduces the friction coefficient and prevents sticking between the press tool and the Zn coating layer. A press forming test of an automobile fender part using the developed steel sheet confirmed that this new product expands the range of the blank holding force in which satisfactory press forming is possible without wrinkles by two times in comparison with conventional GI steel sheets. JFE steel was awarded the Director-General’s Prize, Agency for Natural Resources and Energy in the FY 2017 Grand Prize for Excellence in Energy Efficiency and Conservation, Product Category & Business Model Category, in recognition of its achievement as a “1.5 GPa class automotive cold-rolled steel sheet that satisfies both energy efficiency and crash performance.”

As steel sheet production equipments, in January 2018, NSSMC’s Nagoya Works Hot Rolling Mill reached a cumulative total of 200 million tons of production since the beginning of operation in June 1963, and at the company’s Kimitsu Works, a new hot-dip galvanizing line for ultra-high strength steel sheets will be constructed, aiming at a start of operation in 2020. At Kobe Steel’s Kakogawa Works, the company is carrying out capital investment centering on continuous annealing equipment, aiming at start of operation in 2021, in order to respond to increased demand for high strength steel sheets for automotive applications.

2.4.2. Pipes

NSSMC developed and began sales of a global environment-friendly new product, a dope-free threaded joint for oil well pipe. The new product improves the torsional resistance and rust-preventive performance of joints that have an actual record of use at present. The new product is a threaded joint that realizes zero environmental loads, as it does not use grease, containing large amounts of harmful heavy metals, particularly lead, has high rust resistance, and can be used repeatedly to joint oil well tubes. Because handling and repair are easy, and operation can be performed easily both on land and at sea, it not only responds to environmental needs, but also contributes to total cost reduction in oil well development projects. In March 2018, it was used in an offshore oil field of Norway, where the world’s strictest HSE (Health, Safety and Ecology) regulations are applied.

JFE Steel carried out a broad renewal of its mechanical joints for steel pipe piles. In comparison with the conventional products, the new products realize a wider applicable range, improved workability and compact size, and thus respond more effectively to the needs of construction sites. In May 2018, the company received Construction Technology Review and Certification (Change of Content) from the Public Works Research Center. In recent years, in addition to heightened needs for shortening the work period and labor-saving in construction work, demand for mechanical joints which do not require on-site welding for joining has increased rapidly against the backdrop of changes in the social conditions surrounding the construction industry, such as a shortage of skilled welders. Requirements for further improvement in mechanical joints for steel pipe piles have also increased, including i) Expansion of the applicable range, ii)Further labor-saving in construction work (reduction of work load in joining), and iii) Improved cost performance. JFE Steel carried out this broad renewal of its mechanical joints for steel pipe piles in order to respond to these new demands.

JFE Steel also developed a high strength cold roll-formed square steel pipe product (hereinafter, Roll Column) for use in building structures, and received approval from the Minister of Land, Infrastructure, Transport and Tourism (MLIT). The design strength (F value) of this Roll Column is 385 N/mm², which greatly exceeds that of general roll columns and is the highest strength of roll columns in Japan. This high strength level enables construction of larger spans than had been possible with roll columns until now, application to high-rise building, and a greater degree of design freedom, for example, an increase in effective indoor area, etc. The size range includes a total of 34 sizes, with a maximum outer diameter of 550 mm and maximum thickness of 25 mm.

2.4.3. Plates

JFE Steel won the Prime Minister’s Prize in the 7th Monodzukuri Nippon Grand Award in the Product & Technology Development Category for “Mega-container transport ships with outstanding safety and environmentally-friendly capabilities, an achievement brought about by an innovative structure and construction technology called ‘structural arrest.’” In a joint project with Japan Marine United and IHI, JFE Steel developed the innovative “structural arrest” technology (a world’s first) by utilizing the distinctive feature of the ship hull as a welded structure. The developed structural arrest technology improves the arrest performance of the ship hull by a new structure that includes welding and design. By developing a high strength extra-thickness steel plate that can be applied to this technology and a revolutionary high efficiency welding technology that can hold down the increase in welding man-hours normally necessary with extra-thickness plates, it was possible to upscale the hull size, increase cargo capacity and improve fuel consumption by reducing hull weight. The world’s best mega container ship, with outstanding safety and environmental performance, was developed thanks to the development of these technologies.

Replacement of a truss bridge was completed using alloy-saving dual-phase stainless steel plates developed by Nippon Steel & Sumikin Stainless Steel Corporation in the main members for the first time in Japan. The truss bridge is located at the confluence of the Sumidagawa and the Sendaiborigawa rivers. The project requirements included the possibility of removal of the existing bridge during construction of a drainage pumping station, considering the siting restriction that the bridge is adjacent to the pumping station; maintenance-free performance, as little space is available under the girders, which makes repainting difficult; and a high strength material was needed in order to realize a flat bridge surface while also increasing the width of the structure. Based on a total study of these requirements, a high strength, high corrosion resistance dual-phase stainless steel (SUS323L, 23%Cr-4%Ni-N) developed by Nippon Steel & Sumikin Stainless Steel was adopted in the main members. The design of the truss is the first example of design in accordance with “Design and Construction Guidelines for Stainless Steel Civil Structures (Draft)” established by the Japan Society of Steel Construction (JSSC) to promote the use of stainless steel in civil structures. It may also be noted that NSSMC’s SUS323L was also adopted in the discharge sluice of the adjoining drainage pumping station.

2.4.4. Bars and Shapes

Topy Industries, Limited began sales of Japan’s first compact coils on October 19, contributing to solving the problems of labor shortages, processing loss and inadequate storage space, which are common issues facing the entire rebar industry. This product is the first compact coil in Japan in which steel rods for reinforced concrete are coiled with a high density. As a result of the construction of a dedicated production line at the company’s Toyohashi Works at a cost of approximately ¥5 billion and trial mass production, Topy received JIS certification continuation approval on September 25 and began sales of a product lineup that includes the three sizes D10, D13 and D16 (weight: 1 t/coil). Drawing, bending and cutting of the compact coils which the company began selling can be automated by using a NC (numerically-controlled) machine, contributing to improvement of hourly productivity and solution of labor shortages by labor saving. Because a free length can be cut from a coil with a total length of about 1000 m (D13 size), loss during processing can be reduced to the absolute minimum, resulting in improved yield. In addition, vertical stacking is possible thanks to high density, compact coiling. As a result, storage space can be improved by approximately 70% in comparison with straight rods, and improvement of transportation efficiency is also expected.

NSSMC has decided to completely overhaul its wheel mill, which is a rolling facility for production of wheels, at Osaka Steel Works of the Railway, Automotive & Machinery Parts Unit as part of efforts to “continue to strengthen the ‘manufacturing capabilities’ of domestic mother mills,” one of the company’s major initiatives in its 2020 Mid-Term Management Plan. The wheel mill is the most important facility which is responsible for forming the required shape into wheels in a hot rolling condition when manufacturing railway wheels. By introducing the world’s most advanced wheel mill and combining it with NSSMC’s unique rotary forging technology in this project, the company aims to further improve the rolling accuracy and quality level in wheel production. Operation is scheduled to start around the spring of 2021, and a total investment cost of approximately ¥2.4 billion is foreseen.

2.5. Characterization, Analysis, and Measurement, Control and Systems

In the characterization and analysis field, the phenomenon of nonuniform change in the chemical states of oxides was observed by the synchrotron X-ray microscopy method, and a research technique for designating the origin of that reaction by utilizing persistent homology, which is a technique of applied mathematics, was developed in a joint project of the High Energy Accelerator Research Organization (KEK; an Inter-University Research Institute Corporation), Tohoku University and NSSMC. The results of 3-dimensional observation of the reduction reaction process of sinter by the synchrotron X-ray absorption fine structure method and investigation of the changes in the valence of iron atoms and the number and distance of adjoining atoms revealed that the reaction proceeds with complex, nonuniform mixing of Fe^III₂O₃, Fe^III₂Fe^IIO₄ and Fe^IIO. Furthermore, the changes in the shape, size and distribution of that heterogeneity were analyzed by persistent homology, and the part that corresponds to its point of origin was successfully mapped. Since this research demonstrated the possibility of identifying the controlling factor of material properties from an enormous volume of data, its uses are not limited to only the mechanical strength of metal oxides. Expanded application to characterization of materials such as catalysts, electrical cells, in which properties are largely related to heterogeneity, is also possible.

In the measurement field, JFE Steel developed a new radiation temperature measurement technology, which received the 2018 Outstanding Paper Award of the Society of Instrumentation and Control Engineers (SICE). The developed technology is a new technique that obtains the temperature by extracting only information which is unaffected by fluctuations in the emissivity of the measurement target by using the optical spectrum and multivariate analysis.

In the systems field, JFE Steel received the “Regional Choice” award in the “SAP Innovation Awards 2018” for its project to overhaul the JFE Group’s “J-Face group-wide accounting system.” The early development of the new system, which also includes JFE Group companies, and the effects of a large reduction in the number of servers in the total accounting system, decrease in operating and maintenance (O&M) costs were highly evaluated. The system was introduced in JFE Steel and JFE Holdings, Inc. over a 9 month period, and expansion to 79 JFE Group companies was completed in 11 months. As a result, the total number of servers in the accounting system was reduced by 75%, and O&M costs were also reduced.

In April 2018, NSSMC newly established “Intelligent Algorithm Research Center,” by gathering approximately 30 researchers to promote the use of advanced IT technologies. Utilizing advanced IoT and AI technologies, as well as big data (operation and quality data), technical know-how and physical models, the Center will create new IT algorithms suitable for the NSSMC Group, and promote Intelligent Scheduling (optimized scheduling of production & delivery), Intelligent Sensing (visualization of quality) and Intelligent Automation (process automation) with the aims of and refining the management/control technologies of each steel works and establishing the foundation for realizing “One Virtual Mill.”

Kobe Steel established a new dedicated unit, the AI Promotion Project Department, with the aim of strengthening product development capabilities and manufacturing capabilities by utilizing artificial intelligence. Although Kobe Steel had used AI since the 1980s, mainly in the process control field in steel manufacturing, the company is expanding the range of use over the period FY 2016 to 2020, and plans to promote the use of data for innovation in manufacturing capabilities. Efforts to apply image recognition using deep learning and use of text mining have also begun. The new department was launched with approximately 20 engineers. The scope of AI use will be expanded to improvement of product development capabilities, and efforts will center on improvement of product development capabilities and solution development capabilities.

Daido Special Steel Co., Ltd. started up a tool steel traceability system in the People’s Republic of China with the aim of identifying counterfeit tool steel products for tools used to produce molded plastic products in that country. The system utilizes an integrated IT authentication platform supplied by Toppan Printing Co., Ltd. Tool steel materials pass through several levels of distribution and sales outlets after shipment, but because they are cut to the size required by the customer in the distribution stage, it is difficult to distinguish genuine and counterfeit products simply be comparing the actual product and the steel material inspection certificate (mill sheet). To solve this problem, Daido created a system that traces the history of transactions from shipment from the factory to the sales outlet, and enables the customer to confirm this. At present, tracing of types of steel with large distribution volumes of counterfeit products has begun. As of June 2018, the system had been introduced at six sales outlets.

2.6. Construction and Civil Engineering

In the construction field, NSSMC developed and commercialized “Fire resisting steel-wooden hybrid column” in joint work with the Japan Laminated Wood Products Association and the Japan Laminated Veneer Lumber (LVL) Association (General Incorporated Association). NSSMC and Nippon Steel & Sumikin Anti-Corrosion Co., Ltd. (now Nippon Steel Anti-Corrosion Co., Ltd.) applied an anti-corrosion construction method using titanium foil to steel lighthouses manufactured during Japan’s Meiji Period (1868–1912), and received the Excellence Award of the 2nd Infrastructure Maintenance Grand Award sponsored by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). As a buckling-restraining brace, which is a type of earthquake-resisting and seismic control device that can efficiently reduce the shaking of buildings in earthquakes, JFE Steel and JFE Civil Engineering & Construction Corporation developed Japan’s largest class high axial force type brace, in which high strength steel is applied as the axial force material. The new type demonstrates approximately double the axial force of the conventional type. The high workability ultra-narrow-gap welding technology for the CO₂ arc welding method developed by JFE Steel was adopted in corner welding in assembly of the box section columns that form the main structure of the 6th floor steel frame of the large keep in the Kumamoto Castle Tower Restoration and Maintenance Project, and construction of the column structure was completed.

In the civil engineering field, a steel pipe pile construction method developed jointly by NSSMC and Giken Ltd. was adopted at the Kochi coastline as a countermeasure for large-scale tsunamis, assuming a Nankai Trough Earthquake. In this construction method, steel tubular piles with a tip bit on the pile toe are placed successively in a row by the rotary press-in pile driving method (Gyropress method) by a self-walking rotary press-in machine. It is used in the construction of wall structures such as river levees and roadway retaining walls, foundation structures and other pile structures. Because construction is possible in areas with limited space and the piles can be driven through existing revetments and rubble, this method can be applied to coastal embankments and seawalls in the disaster prevention and disaster mitigation field, and can contribute to early recovery after disasters. Obayashi Corporation, in a joint project with Kameyama and NSSMC, developed a construction method which greatly reduces weight, lightens the work load, increases productivity and shortens construction time by reducing the thickness of long steel pipes used in the long pipe forepoling method in the construction of mountain tunnels. Although the steel pipes used in the conventional method were TK400, high strength steel pipes with tensile strength of 1000 N/mm² were adopted. The wall thickness of the pipes was reduced to 3.5 mm by stabilizing the pipe-making process, and as a result, the unit weight of the pipes was reduced from the conventional 50 kg to 29.4 kg, achieving a weight reduction of more than 40%. Corrosion Resistance Steel for Repainting Cycle Extension developed by NSSMC, was adopted in the Maki Minato Bridge in the Urasoe North Road section of the Okinawa West Coast Road in Okinawa Prefecture, which has the harshest salt damage environment in Japan, and JFE Steel also developed a new steel plate which makes it possible to extend the repainting cycle of bridges, construction, and industrial machinery, by more than two times in comparison with mild steel. The new steel materials developed by these two companies contribute to reducing the life cycle cost of steel structures used under harsh corrosion environments by extending the repainting cycle.

2.7. Environment and Energy

2.7.1. International Negotiations on Climate Change and Efforts of the Japanese Government

In 1992, the world ratified the United Nations Framework Convention on Climate Change (UNFCCC) under the United Nations with the ultimate aim of stabilizing the concentration of greenhouse effect gases (GHG) in the atmosphere, and since 1995, sessions of the Conference of the Parties to the UNFCCC (COP) have been held each year based on that agreement. The Kyoto Protocol, which clearly laid out binding reduction targets for the advance nations (Annex I Parties), was agreed at the 3rd session of the Conference of the Parties (COP3) held in Kyoto in 1997. For the period after 2013, which marked the end of the First Commitment Period of the Kyoto Protocol, the Kyoto Protocol clearly stated that the provisions concerning the reduction targets of the advanced countries would be revised and new targets would be established, and study of that issue would begin in the year 2005 at the latest. Based on this, AWG-KP (Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol) was established in 2005. On the other hand, construction of a more comprehensive post-2013 framework that also included advanced countries that had not ratified the Kyoto Protocol, and developing countries was considered necessary, and AWG-LCA (Ad Hoc Working Group on Long-term Cooperative Action under the Convention) was established at COP13, which was held in Bali, Indonesia in 2007, with the aim of obtaining agreement by the end of 2009. Discussions on the reduction targets and actions of all countries until 2020 were held under these two Ad Hoc Groups. Following the Copenhagen Agreement at COP15 in Copenhagen, Denmark in 2009 and the Cancun Agreements at COP16 at Cancun, Mexico in 2010, the Paris Agreement was adopted at COP21, which was held in Paris, France in 2015.

At COP24, which was held in Katowice, Poland on November, 2018, implementation guidelines for the Paris Agreement were agreed and adopted with the aim of making the international framework for holding the atmospheric temperature rise to less than 2°C embodied in the Paris Agreement fully operational in 2020 and thereafter.²³⁾ The advanced countries and developing countries reached agreement on financial support and reduction targets, and the Paris Agreement will be applied from 2020. The main points agreed at COP24 were (i) reporting by the advanced countries concerning their expected financial support for the developing countries in concrete terms every 2 years, (ii) introduction of common rules for setting reduction targets and verification of the total amount of reductions, such as submission of objective data, with no differences between the advanced and developing nations and (iii) addition of further reduction targets above the present reduction targets. On the other hand, conclusions on the “market mechanism,” which allows parties to apply an amount equivalent to reductions in other countries to their target achievements, and the question of whether the target period for reductions should be 5 or 10 years were left to 2019 and after.

In Japan, the government established the Plan for Global Warming Countermeasures on May, 2016 based on the Act on Promotion of Global Warming Countermeasures in order to promote global warming countermeasures comprehensively and strategically. The plan prescribes the targets of emission reduction and removal of GHG, basic matters concerning actions to be taken by businesses and the public, and policies to be implemented by the National Government and Local Governments for target achievement. The Round Table for Studying Energy Situations of the Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry (METI), discussed the direction of long-term energy policy toward the year 2050 and compiled “Recommendations by the Round Table for Studying Energy Situations – Initiative for Energy Transitions” on April, 2018. Regarding the long-term target of an 80% reduction of GHG by 2050 in the Plan for Global Warming Countermeasures based on the Paris Agreement, the group presented directions for realizing long-term targets, under the recognition that achievement of that target will be difficult by an extension of only past efforts. Moreover, as the effects of climate change have already appeared throughout the county, including higher temperatures, an increase in the frequency of heavy rain, decreased quality of agriculture products, changes in the ranges of plant and animal, increased risk of heat stroke, and there are concerns that those effects will increase further over the long term, the Climate Change Adaptation Act was promulgated on June, 2018 and enforced on December 1. The new law establishes adaptation measures for prevention/mitigation of damage due to the effects of climate change.

2.7.2. Efforts of the Japanese Iron and Steel Industry

The Japan Iron and Steel Federation (JISF) is continuing the Voluntary Action Programme of the Iron and Steel Industry implemented during the First Commitment Period of the Kyoto Protocol, and is currently promoting Commitment to a Low Carbon Society – Phase I, with a target of FY 2020. In November 2014, the JISF established Phase II of the Commitment to a Low Carbon Society, targeting FY 2030, anticipating the setting of Japan’s Intended Nationally Determined Contribution (INDC) for GHG emissions. The basic concepts of these voluntary activities are four pillars, namely, the three “eco” approaches of “Eco-Processes,” “Eco-Products” and “Eco-Solutions,” together with “Innovative Technology Development.²⁴⁾ In FY 2017, the CO₂ emissions of the companies participating in the Commitment to a Low Carbon Society were 179.69 million tons on a BAU basis, and corrected emissions for the fiscal year (considering changes in the production composition ratio and fixing the electric power emission factor) were 177.52 million tons. As a result, the reduction against the baseline year of FY 2005 was 2.29 million tons, or 710000 tons short of the achievement target of 3 million tons. Total emissions of the iron and steel industry in FY 2017 were 185.64 million tons.²⁵⁾

Eco-Processes are processes with the aim of energy-saving/CO₂ reduction efforts in iron and steel production processes, Eco-Products are products that contribute to reductions in the product use stage by supply of high functionality steel products and Eco-Solutions contribute to reduction at the global scale through the transfer and dissemination of energy-saving technologies developed and applied practically by the Japanese steel industry. As Innovative Technology Development, the Japanese iron and steel industry is grappling mainly with the development of an innovative steelmaking process (COURSE50: CO₂ Ultimate Reduction in Steelmaking Process for Cool Earth 50) and the development of an innovative iron-making process (Ferrocoke). Table 2 shows the targets of the Commitment to a Low Carbon Society.²⁴⁾

Table 2. Targets of JISF Commitment to a Low Carbon Society.²⁴⁾

		Phase I	Phase II
Eco-Processes		Reduction target of 5 million t-CO2 vs BAU*2	Reduction target of 9 million t-CO2 vs BAU*1
Eco-Products		Contribute to reduction of approx. 34 million t-CO2 (estimated)	Contribute to reduction of approx. 42 million t-CO2 (estimated)
Eco-Solutions		Contribute to reduction of approx. 70 million t-CO2 (estimated)	Contribute to reduction of approx. 80 million t-CO2 (estimated)
Innovative Technology Development	Development of Innovative Steelmaking Process (COURSE50)	30% reduction of CO2 emissions in production process by reduction of iron ore by hydrogen and separation/recovery of CO2 from blast furnace gas. Start of commercial operation of No. 1 unit around 2030*3 aiming at wide adoption by around 2050, based on the timing of replacement of blast furnace-related equipment.
	Development of Innovative Iron-making Process (Ferrocoke)	Innovative technology development with the aim of satisfying both energy saving in the ironmaking process and expanded use of low grade raw materials by developing ferrocoke, which demonstrates the functions of accelerating/reducing the temperature of the reduction reaction in the blast furnace, together with its operating technology.

*1  BAU: Abbreviation of “Business as Usual”; in these target values, it means the amount of CO₂ emission assuming crude steel production in these respective phases, against the baseline year of FY 2005 .

*2  Of the 5 million ton-CO₂ reduction target, while continuing the commitment to a 3 million ton-CO₂ reduction based on energy saving and other self-help activities, for waste plastic, etc., only the amount equivalent to the increased quantity of collected wastes, etc. against the FY 2005 baseline is counted as an actual reduction.

*3  Preconditioned on creation of infrastructure for CO₂ storage and securing economic rationality for commercial equipment.

The COURSE50 project, which is positioned in the NEDO project “Environmentally Harmonized Steelmaking Process Technology Development,” was launched in FY 2008. The purpose of the project is to develop technologies for reduction of the amount of CO₂ generated by blast furnaces and technologies for separation and recovery of generated CO₂ in order to contribute to prevention of global warming. Concretely, a technology for increasing the hydrogen content of high temperature coke oven gas (COG) generated during coke-making and reduction of iron ore by using that hydrogen as a partial substitute for coke will be developed. Innovative technologies for CO₂ separation and recovery utilizing unused waste heat in steel works will also be developed for separation of CO₂ from blast furnace gas (BFG). Reduction of CO₂ emissions by approximately 30% by these developed technologies is targeted. In this technology development, development of the element technologies was carried out as Phase I – Step 1 (FY 2008–2012). Following that work, a pilot level total demonstration test combining the various element technologies was carried out in Phase I – Step 2 (FY 2013–2017) with the following targets: a) As a technology for reduction of CO₂ emissions from the blast furnace, establishment of a technology for reduction of CO₂ emissions from the blast furnace by using a 12 m³ test blast furnace and b) As a technology for CO₂ separation and recovery from BFG, establishment of a technology which enables CO₂ separation and recovery from BFG at a cost of ¥2000/ton-CO₂.²⁶⁾ As results, the possibility of reduced CO₂ operation of the blast furnace by utilizing hydrogen was demonstrated by using the test blast furnace, and the world’s top level CO₂ absorption solution and process was also realized in blast furnace CO₂ separation and recovery.

COURSE50 (Phase II STEP1) CO₂ Ultimate Reduction in Steelmaking process by innovative technology for cool Earth 50 (Phase II – Step 1 (FY 2018–2022)) began in FY 2018. Through Phase II – Step 2 (FY 2023–2025), this technology will ultimately make it possible to achieve a CO₂ reduction of approximately 30% in comparison with the total emission level in steel works at present. The final targets of Phase II – Step 1 are a) As a technology for reducing CO₂ emissions from the blast furnace, realization of test operation of “Full circumference tuyere blowing” for use in partial verification with an actual blast furnace, and reduction of blast furnace CO₂ emissions by approximately 10% by the 12 m³ test blast furnace, and b) As a technology for CO₂ separation and recovery from BFG, development of the technology aiming at separation and recovery of CO₂ from BFG at a cost of ¥2000/t-CO₂, and achievement of separation and recovery energy of 1.6 GJ/t-CO₂, contributing to a technology for realizing a CO₂ emission reduction of approximately 20%.²⁶⁾

The ferrocoke project was originally carried out over a 3-year period beginning in FY 2006 by a joint industry-academia project of the Ministry of Economy, Trade and Industry called “Leading Research into Innovative Ironmaking Processes.” Development was continued as the project “Technological Development of Innovative Ironmaking Process to Enhance Resource Flexibility” of METI and the New Energy and Industrial Technology Development Organization (NEDO) over a 4-year period from FY 2009, and the element technologies were developed. Ferrocoke, which is produced by mixing, molding and carbonizing steam coke and low grade iron ore, is an innovative agglomerated material that dramatically increases reduction efficiency. This process is an energy saving technology in which the amount of coke (amount of carbon) charged into the blast furnace can be reduced by using ferrocoke and performing reduction at a low temperature by utilizing the catalytic action of the metallic iron contained in the ferrocoke. Because the energy saving and CO₂ reduction effects can be optimized by incorporating the knowledge and results obtained with this technology in the hydrogen reduction process, the ferrocoke project was added to the NEDO project “Environmentally Harmonized Steelmaking Process Technology Development” and has been carried out since FY 2017 with a 5-year timeframe as “Environmentally Harmonized Steelmaking Process Technology Development/Iron-making Process Technology Using Ferrocoke.” In this technology development, the ferrocoke production technology will be established through demonstration research with medium-scale production equipment having a ferrocoke production scale of 300 t/d, targeting a 10% reduction in energy consumption in the iron-making process by around the year 2022.²⁶⁾ As part of the technology development project, JFE Steel decided to construct a pilot plant with a production scale of 300 t/d on the grounds of its West Japan Works (Fukuyama District).

As efforts by individual steel companies, NSSMC has successively promoted plastic recycling by the coke oven chemical raw material method (feedstock recycling method) in actual coke ovens since 2000, and in November 2018, the company achieved a cumulative total recycling amount of 3 million tons. The main object of this process is general waste-type plastics under the scheme of Japan’s Containers and Packaging Recycling Law. NSSMC has installed pretreatment equipment and equipment for charging the waste plastic into coke ovens at its steel works, where it recycles the plastic by the coke oven chemical raw material method. At its five steel works (Kimitsu, Nagoya, Yawata, Oita, Muroran), the company receives around 30% of the container and packaging plastics consigned to the Containers and Plastics Recycling Association by local governments for recycling at seven coke ovens. In terms of the environmental load reduction effect, the cumulative treatment total of 3 million tons of waste plastic which the company achieved recently is equivalent to a CO₂ reduction of about 9.6 million t-CO₂ and avoids landfill disposal of approximately 12 million m³ of waste plastic. In addition to these actual recycling results, this method has also been publicly recognized in society by the Okochi Memorial Production Prize (FY 2011), the Outstanding Technology Achievement Award of the Research Association for Feedstock Recycling of Plastics Japan (FY 2013) and the Commendation for Science and Technology by the Minister of Education, Culture, Sports, Science and Technology (FY 2014).

JFE Steel had carried out a study in connection with a coal-fired thermal power plant, which was to be established jointly with the Chugoku Electric Power Co., Inc. and Chiba Power Corporation, a Special Purpose Corporation, but announced in December 2018 that it had discontinued those efforts based on the judgment that the project lacked sufficient commercial feasibility, and would begin a feasibility study of a natural gas-fired thermal power plant. The coal-fired power plant that was the object of the canceled study was an ultra-supercritical power plant with an output of approximately 1.07 GW and had been scheduled to begin operation in 2024. In another development, the “Environment-friendly hot metal pretreatment process” developed by JFE Steel was certified under the “Low CO₂ Kawasaki Brand,” which is regulated by Kawasaki City. This process makes it possible to add the desulfurizing agent in its existing fine condition (diameter ≦1 mm) directly to the hot metal together with a high speed carrier gas from the injection lance. As results, desulfurization efficiency is improved by 1.3 times and CO₂ emissions are reduced. In August 2018, Kobe Steel’s Kobe Works, Kobelco Power Kobe Inc. and Kobelco Power Kobe-2 Inc. re-signed an environmental protection agreement with Kobe City concerning a business site comprising Kobe Works and Kobe Power Plant. Until now, pollution prevention and environmental protection efforts had been carried out under an environmental protection agreement concluded with Kobe City in December 1998 at the time of construction of the existing Kobe Power Plant No. 1 and No. 2 units. On this occasion, the provisions of the environmental protection agreement, standard values, etc. were reviewed based on the environmental impact assessment of the construction plans for Kobe Power Plant No. 3 and No. 4 units, the shutdown of the blast furnace at Kobe Works due to consolidation of the plant’s upstream process on Kakogawa Works accompanying restructuring of the company’s steel products business, etc. In addition to a decrease in the regulatory value of soot and smoke discharged from the site and lowering of the water pollution load, the new agreement also adds new provisions requiring establishment of a hydrogen station for fueling hydrogen vehicles and facility for hydrogen production using sewage sludge fuel, which will be performed for control of the mercury concentration in off-gas and reduction of CO₂ in the area.

As efforts for environmental improvement, joint research on restoration of the water purification capacity of the ocean area fronting Yamashita Park in Yokohama, which JFE Steel and Yokohama City began in 2013, was concluded as scheduled in March 2018, and water quality improvement results sufficient for plant and animal life in the waters were achieved by placing a steel slag product in the waters. Until the project, living organisms had rarely been seen in these waters, where the sea bottom was covered with sludge. However, after steel slag stones were installed as a base for adhering organisms, various improvements in the environment could be seen, including shellfish and sea squirts living on the stones and large numbers of fish gathering in the waters.

2.8. Others

NSSMC won the Special Award of the 7th Monodzukuri Nippon Grand Awards for “Development of a compact, lightweight permanent magnet-type auxiliary braking system (retarder).” When this retarder is used, the magnetic force of the permanent magnet acts on a steel rotor without contact, thereby applying braking force. Conventionally, a switching method in which a neodymium magnet slides in the axial direction, etc. had been adopted. The features of the developed technology include a dedicated heat-resistant steel for the rotor, a high efficiency magnetic circuit, a multilayer copper plating technology for the rotor, a multistep braking force switching control technology, a part-saving device structure that reduces the number of parts, etc. In comparison with the conventional type, the developed technology increases braking force per unit mass by 2.1 times and shortens response time by 53%.

Diado Special Steel Co., Ltd., Daido Electronics Co., Ltd. and Honda Motor Co., Ltd. received the Ministry of Economy, Trade and Industry Minister’s Prize in the 7th Monodzukuri Nippon Grand Awards for development of neodymium magnets manufactured by a hot deformation method as completely heavy rare earth-free magnets and a drive motor for HEVs (hybrid electric vehicles) using the developed magnets. Completely heavy rare earth-free neodymium magnets which possess high coercivity and high heat resistance were developed by applying a proprietary hot deformation method developed by Daido Special Steel. Mass production was achieved for the first time in the world, and HEV drive motors with performance equal to that of the conventional type were realized with completely heavy rare earth-free magnets.

In a joint project, Tokyo University of Marine Science and Technology, ABB Corporate Research and NSSMC developed a new high temperature superconducting (HTS) bulk synchronous motor and successfully conducted rotating tests. Although many conventional superconductor motors have used coils wound with superconductor wire, Tokyo University of Marine Science and Technology and ABB designed, fabricated and successfully carried out a series of rotating tests of a prototype device with output of 30 kW using large-scale magnets produced by molding and assembly of a combination of multiple high quality HTS bulks developed by NSSMC.

3. Technology Trade and Development

3.1. Technology Trade

Figure 4 shows the transition of the balance of technology trade in the steel industry up to FY 2017.²⁷⁾ Payments received for technology exports increased by 42% in comparison with the previous fiscal year, while payments for technology imports were the same as last year.

Fig. 4.

Balance of technology trade of steel.²⁷⁾

3.2. Research Expenditures and Number of Researchers

The following three items were arranged using data in Table 3 Research Activities in Companies of the statistical tables in the outline of results in Statistical Survey of Researches in Japan, which is published by the Statistics Bureau, Ministry of Internal Affairs and Communications. The results are shown in Figs. 5, 6, 7.²⁸⁾

Table 3. Examples of themes utilizing public funds in steel industry.

Class	Name of project	Managing organization	Start (FY)	End (FY)
Processes	Environmentally Harmonized Steelmaking Process Technology Development (STEP2) COURSE50:CO2 Ultimate Reduction in Steelmaking process by Innovative technology for cool Earth 50	New Energy and Industrial Technology Development Organization (NEDO)	2018	2022
	Innovative and integrated high-grade steel making processes coping with inevitable degradation of iron ore	NEDO	2018	2019
Element technologies	Heterogeneous Structure Control: Towards Innovative Development of Metallic Structural Materials	Japan Science and Technology Agency (JST)	2010	2019
	Element Strategy Initiative: To Form Core Research Centers - Structural Materials	Ministry of Education, Culture, Sports, Science and Technology (MEXT)	2012	2021
	Development of Technologies for Next-Generation Thermal Power Generation	NEDO	2016	2021
	Research, Development and Demonstration of CCS Technology	NEDO	2018	2022
	Strategic Innovation Creation Program (SIP) - Innovative Structural Materials	Cabinet Office, Japan	2014	2018
Products	Research and Development of Innovative Structural Materials	Ministry of Trade, Economy and Industry (METI)	2013	2022
	Research and Development Project on Technology for Full-Scale Dissemination of Ultra-High Pressure Hydrogen Infrastructure	NEDO	2018	2022
Other	Manufacturing innovation through development of next-generation 3D printers, etc.	METI	2014	2018
	Project for Super-Rapid Development Infrastructure Technologies for Super-Advanced Materials	NEDO	2016	2020
	Research and Development Project on Technology for Full-Scale Dissemination of Ultra-High Pressure Hydrogen Infrastructure	NEDO	2018	2022

Fig. 5.

Trend of ratio of R&D expenditures to sales.²⁸⁾

Fig. 6.

Trend of the number of researchers per 10000 employees.²⁸⁾

Fig. 7.

Trend of R&D expenditure per researcher (10 million yen/person).²⁸⁾

[Ratio of Research Expenditures to Sales] In both all industries and the steel industry, this item increased slightly in comparison with the previous fiscal year. In both cases, the results for FY 2017 were on the level of FY 2009 to FY 2011.

[Number of Regular Researchers per 10000 Employees] In all industries, this index increased, marking a change from the decreasing tendency that had prevailed since FY 2013, and the result for FY 2017 was on the same level as in FY 2008. In the steel industry, this index showed an increasing tendency until FY 2011, when the industry recorded its highest number, but has continued at a lower level since FY 2012.

[Research Expenditures per Regular Researcher] In FY 2017, all industries showed a slight increase in comparison with the previous fiscal year. The steel industry also increased in comparison with the previous fiscal year, but was still on same level as in FY 2008, prior to the 2008 financial crisis.

3.3. Trends in Research and Development Utilizing Public Funds

Among iron and steel-related technical development projects, the NEDO projects “Environmentally Harmonized Steelmaking Process Technology Development (COURSE50) STEP 2,” “Development of Clean Coal Technologies: High-efficiency Coal-fired Power Generation Technologies” and “Research and Development Project on Hydrogen Utilization Technologies” were completed in FY 2017. The NEDO projects launched in FY 2018 were “COURSE50 (Phase II STEP1) CO₂ Ultimate Reduction in Steelmaking process by innovative technology for cool Earth 50,” “Research, Development and Demonstration of CCS (Carbon dioxide Capture and Storage) Technology” and “Research and Development Project on Technology for Full-Scale Dissemination of Ultra-High Pressure Hydrogen Infrastructure.” The main continuing projects were the MEXT project “Heterogeneous Structure Control: Towards Innovative Development of Metallic Structural Materials” (FY 2010–2019, managing organization: Japan Science and Technology Agency (JST)), the METI project “Research and Development of Innovative Structural Materials” (FY 2015–2022, managing organization: NEDO) and the Cabinet Office, Japan projects “Strategic Innovation Creation Program (SIP) - Innovative Structural Materials” (FY 2014–2018, managing organization: JST) and “Project for Super-Rapid Development Infrastructure Technologies for Super-Advanced Materials” (FY 2016–2021, managing organization: NEDO), etc.

The main projects on iron and steel-related research and development topics being carried out with public funds are shown in Table 3. Many of these topics are in the fields of processes, environment/energy, materials development, etc.

4. Development of Human Resources in Technical Fields

The Iron and Steel Institute of Japan (ISIJ) conducts corporate human resource training programs (Iron and Steel Engineering Seminars, Iron and Steel Engineering Seminar special courses, Advanced Iron and Steel Seminars) and human resource training programs for students on an on-going basis for the purpose of developing cross-industry human resources.

As human resources training programs for students, in addition to “Student Iron and Steel Seminars,” in FY 2011, the ISIJ took over the Industry-Academic Partnership for Human Resources Development and conducts “Introduction to Iron and Steel Engineering Seminar” for master’s level graduate students and the “Experiential Seminar on Advanced Iron and Steel” for undergraduates under this program. The “Introduction to Iron and Steel Engineering Seminar” is a 3.5 day course consisting of lectures on the fundamentals of iron and steel engineering and technology development at the site by teachers from universities and companies, together with a plant tour on the final day (conducted at NSSMC Yawata Works in FY 2018). In FY 2018, 34 students from 13 universities participated. The “Experiential Seminar on Advanced Iron and Steel” is a 1-day course consisting of an introduction to advanced technologies related to iron and steel and outlook for the future and a plant tour. In FY 2018, this seminar was held at four locations, JFE Steel West Japan Works (Kurashiki District) and East Japan Works (Keihin District), Kobe Steel Kakogawa Works and NSSMC’s Muroran Works. A total of 104 students participated.

As other activities, “University Special Lectures by Top Management” by members of the top management of steel companies were held at 11 universities, and “Special Lectures on Iron and Steel Technology” by the former Chairman or Executive Director of the ISIJ were held at 13 universities. A total of approximately 2200 students attended these events. The ISIJ also carried out a project supporting the cost of bus transportation for steel works tours planned by universities.

5. Technology Creation Activities in the ISIJ

The ISIJ conducts activities in which it surveys technical information related to iron and steel production technologies, identifies issues for technology development and conducts activities to solve those issues. In these activities 2 committes are playing central parts. Technical Committees and Interdisciplinary Technical Committees, which are affiliated with the Technical Society (Table 4). In addition, beginning in 2015, the “Working Group for Study of Steel Building Material Use” was established under the Production Technology Division Technical Committees, and carried out a study on the creation of new technologies related to steel structures and steel materials in cooperation with the Japan Society of Steel Construction. The investigation Committee for Global warming mitigation technologies for the Steel industrys, CGS was also newly established in April 2018, and began a wide-ranging study of technologies contributing to reduction of CO₂ emissions from the iron and steel industry, not limited to utilization of the blast furnace process.

Table 4. Main organization in technology creation activities of Production Technology Division.

Class	Content of activities
Technical Committees	•Object: Designated fields related to iron and steel production as a whole.
	•Classification of committees: Iron-making, Coke, Steelmaking, Electric Furnace, Special Steels, Refractories, Heavy Plates, Hot Strip, Cold Strip, Coated Steel Sheet, Large Sections, Bar and Wire Rod Rolling, Steel Pipe and Tubes, Rolling Theory, Heat Economy Technology, Control Technology, Plant Engineering Technology, Quality Control, Analysis Technology, (total of 19 Technical Committees).
	•Participants: Steel company engineers and researchers, staff of universities, etc.
	•Purpose of activities: Technical exchanges related to iron and steel production for improvement of production site technology levels, identification and solution of technical of technical problems in various fields, training of young engineers, improvement of technology by industry-academic collaboration, technical exchanges with overseas.
	•Activities: Committee meetings (1–2 times/year), meetings of Interdisciplinary Technical Committees handling designated topics, lecture meetings for training of young personnel and various other types of plans, etc.
Interdisciplinary Technical Committees	•Object: Interdisciplinary or inter-industry technical subjects spanning various fields of the iron and steel production process.
	•Classification of committees: Interdisciplinary Technical Committees on “Challenge to achieve higher quality of modern structural steels through the manufacturing process,” “Desirable steel materials for automobiles,” and “Materials for pressure vessels (total of 3 Interdisciplinary Technical Committees).
	•Content of activities: Technical study for technological directions and problem-solving, surveys and other types of research, information exchanges with other associations, etc.

5.1. Technical Committees

Technical Committees, each of which promotes activities in designated fields related to iron and steel production, hold regular Committee Meetings, where key issues at the present point in time are energetically discussed as common/important topics (Table 4). In FY 2018, a total of 34 Committee Meetings were held, comprising 16 Spring Meetings and 18 Fall Meetings. The total number of participants was 2761 (including a total of 55 researchers from universities, a decrease of 11 from FY 2017). The total number of participants decreased by about 80 persons from the 2843 in FY 2017. Among the FY 2018 Fall Meetings, the Steelmaking Committee and Special Steels Committee held a joint committee meeting, and it seems that this may have had some effect on the total number of participants.

In addition, various types of plans for training young persons are being actively promoted in Committee Meetings, and joint plans with the ISIJ’s Academic Division have also been continuing to take firm root. Moreover, international exchanges activities continue to be active, as the number of Technical Committees that participate in international conferences, and conduct surveys of overseas technology and plant tours, and receive visiting groups from overseas is also continuing to increase. Technical Subcommittees, which conduct joint studies of designated technical problems as priority issues in each Technical Committee, carried out activities on a total of 20 themes. Technical Committees are also continuing to conduct a variety of other activities, including seminars and plant tours/seminars with other industries, as on-going activities from earlier years.

5.2. Interdisciplinary Technical Committees

Interdisciplinary Technical Committees (Table 4) study interdisciplinary and inter-industry technical issues. In FY 2018, three committees were active.

The Interdisciplinary Technical Committee “Pursuit of ultimate properties of practical structural steels and improvement of the reliability of practical structural steels by manufacturing by integrated production process” prepared a report summarizing the results of activities over a 3-year period, and studied topics for the next period and the manner of proceeding with activities.

The Interdisciplinary Technical Committee on “Desirable steel materials for automobiles” submitted topics to the Society of Automotive Engineers of Japan (JSAE), while continuing to explore the proper form of a new cooperative relationship with auto makers. A joint symposium of the JSAE, the Japan Institute of Metals and Materials and ISIJ was also held.

Continuing from FY 2017, in the Interdisciplinary Technical Committee on “Pressure vessel materials,” the “Working Group on Study of Standards for Steel Materials,” “Working Group on Evaluation of Hydrogen Embrittlement of Steel Materials for Chemical Plants” and “Working Group on Advanced Heat-Resistant Steels” carried out respective activities.

5.3. Research Grants and Research Groups

The content of activities related to research grants of the ISIJ is shown in Table 5. In “Grants for Promotion of Iron and Steel Research,” 32 new projects (including 19 by young researchers) were selected to begin receiving grants in FY 2018. Together with the 35 projects that began in FY 2017, a total of 67 projects were carried out based on grant topics in FY 2018.

Table 5. Research grant system of ISIJ.

Class	Content of activities
ISIJ promotion research grant	•Purpose: Activation of iron and steel research, support for basic and infrastructural research related to iron and steel, training of young researchers
	•Application process: Selected each year based on public invitation; grant period is 2 years.
	•Features: Object is individual researchers, establishes a framework for young researchers.
	•Number of projects: 67 (number of aid recipients in FY 2018).
Research Groups	•Purpose: Activation of iron and steel research, creation of foundations for technical innovation, creation of human research network by industry-academic collaboration.
	•Application process: Selected each year based on proposals, public invitation; in principle, period of activity is 3 years.
	•Features: Establishes “Research Group I,” which treats “seed”-led basic/advanced themes from universities and other research institutions, and “Research Group II,” which treats “need”-led applied/industrial themes from iron and steel companies.
	•Number of projects: 23 (number in progress at end of Dec. 2018).
ISIJ Research Projects	•Purpose: Solution of technical problems of iron and steel industry, research on areas which are both important and basic, development to National Projects, etc.
	•Application process: Selected by public invitation; in principle, period of activity is 3 years.
	•Features: Projects focus mainly on needs from steel companies.
	•Number of projects: 0 (themes in progress during 2018. 0; start of activities on new themes from FY 2019).

In FY 2018, 23 Research Groups were active, of which 9 concluded their activities during the same fiscal year. During FY 2018, a total of 8 Research Groups began new activities; 5 Groups began activities in Research Group I (“Seeds”) while 3 Groups began activities in Research Group II (“Needs”) (including an FS Research Group with an activity period of 1 year). As Research Groups to be started from FY 2019, 5 items in Group I and 4 items in Group II were selected, and 1 item was also selected as an ISIJ Research Project.

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