The unique confluence of events sparked by the COVID-19 pandemic and that have led BlueScope to post its largest half year profit of its corporate life are here to stay, BlueScope CEO Mark Vassella has predicted.
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A boom in home renovations and suburban developments has supercharged demand for BlueScope products such as ColorBond, as has the building of large distribution centres for online order fulfilment and data centres.
"Those trends, while having a short term impact, I'm pretty confident that these are actually going to be longer term trends, and they're all things that help underpin the use of steel," Mr Vassella said.
Adding to this mix will be the building of new renewable energy infrastructure, much of which depends on steel, and the BlueScope CEO expects that there will be a long term demand for steel from its Port Kembla steelworks.
"Without steel, you can't have solar farms, wind towers, or energy transmission infrastructure. So the growth in those areas is all about continued use of steel, which is great for the Illawarra," he said.
The business is so confident about the future of its local facilities that it is taking the next step in the reline of blast furnace no. 6, the facility which was mothballed in 2011 when the steel industry in Australia was in serious doubt.
The price has increased by $200-300 million to $1 billion, however the project has now moved into the feasibility stage, with a final board decision expected before the end of the year.
The renewed blast furnace will utilise existing steel-making technology, however with the addition of extra abatement technologies, such as a waste heat recovery system, water treatment plant upgrades and a top gas recovery turbine.
While there have been calls for BlueScope to increase the pace at which it adopts low carbon steel making technology, Vassella said he did not see technologies becoming ready by 2026 - when the renewed blast furnace is to come online - that would enable the production of so called 'green steel'.
"Our current thinking is we just don't see that any of the technologies that are currently being explored or investigated are going to be ready to install at Port Kembla and produce three million tons of steel."
The restricted footprint of the Port Kembla steelworks also comes into play. Only having one ironmaking facility and a single steelmaking facility prevents tests and prototypes from being run, without impacting existing production.
As the company prepares for a net zero future by 2050, other movements in the industrial landscape have Mr Vassella concerned, particularly the bringing forward of the closure of coal fired power stations, such as Eararing, brought forward by seven years last Friday.
"This can have a significant impact on BlueScope if costs or availability becomes an issue. We keep advocating for an orderly transition from the existing electricity network to a more renewable network - which we are all supporters of - and that we can't leave industries or people behind."
While the Australian Energy Market Operator (AEMO) has previously said that battery storage and gas powered generators would ensure reliability when coal-fired power plants close, Mr Vassella was less optimistic.
"Quite frankly, the energy profile of a company like ours - 24/7, massive loads - just can't be met by batteries at this stage. So that's why this transition, whether it's Snowy 2.0, whether it's a Kurri Kurri gas peaking plant, whatever it might be, needs to be done in an orderly fashion."
Sustainable steel comes not only from steel's environmental credentials, and the ResponsibleSteel certification, announced by BlueScope on Monday, should be worn as a badge of pride for all those who work at the Port Kembla site, said Mr Vassella.
"What it says is that we are responsible steelmaker, and we're the only steel company in the southern hemisphere that is accredited at this stage."
The certification covers environmental, social and governance metrics and the steelmaker would continue to push for gender parity in its local operations.
"I think it's absolutely critical that we have a population in our workforce that represents the communities in the markets that we operate in," Mr Vassella said.
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