This Morning in Metals: Natural gas prices to remain elevated this winter
This morning in metals news: the Energy Information Administration forecasts natural gas prices will remain elevated this winter; meanwhile, Rio Tinto said it is working on new technology for the production of low-carbon steel; and, lastly, miner BHP and South Korean steelmaker POSCO signed a memorandum of understanding to explore the reduction of greenhouse gas emissions in the steelmaking process.
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Natural gas prices to remain elevated this winter
To the chagrin of industrial users and residential consumers alike, natural gas prices are likely to remain high this winter, the Energy Information Administration says.
“In our October Short-Term Energy Outlook (STEO), we forecast that natural gas spot prices at the U.S. benchmark Henry Hub will average $5.67 per million British thermal units (MMBtu) between October and March, the highest winter price since 2007–2008,” the EIA said. “The increase in Henry Hub prices in recent months and in our forecast reflect below-average storage levels heading into the winter heating season and strong demand for U.S. liquefied natural gas (LNG), even though we’ve seen relatively slow growth in U.S. natural gas production.”
However, the EIA forecasts Henry Hub prices will decline after Q1 2022.
Rio Tinto works on technology to replace coking coal with biomass in steelmaking
Rio Tinto announced it is working on technology that seeks to replace coking coal with sustainable biomass in the steelmaking process.
“Over the past decade, Rio Tinto has developed a laboratory-proven process that combines the use of raw, sustainable biomass with microwave technology to convert iron ore to metallic iron during the steelmaking process,” Rio Tinto said. “The patent-pending process, one of a number of avenues the company is pursuing to try to lower emissions in the steel value chain, is now being further tested in a small-scale pilot plant.
“If this and larger-scale tests are successful, there is the potential over time for this technology to be scaled commercially to process Rio Tinto’s iron ore fines.”
BHP, POSCO sign MoU
In a similar vein, miner BHP and South Korean steelmaking giant POSCO have signed a memorandum of understanding to explore greenhouse gas emissions reduction technology.
“As part of the MoU, the parties intend to undertake pilot and plant trials to lower carbon in the steelmaking process, including optimising coke quality and assessing carbon capture storage and utilisation (CCUS) options to lower carbon intensity in the blast furnace,” BHP said.
“POSCO and BHP also intend to share research on hydrogen-based direct reduction technology, the use of biomass in steelmaking, as well as the potential to leverage BHP’s carbon offsetting capabilities in the development of carbon neutral steel products.”
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