# Japan's GDP Miss, BlueScope Steel Earnings

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 16 Feb 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/9473b592-d7f2-4fc5-9495-b3f300220cd1/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Japan's economic output in the fourth quarter of 2025 was much weaker than expected, registering anemic growth after a deep contraction in the previous period, underscoring the case for Prime Minister Sanae Takaichi's proactive spending policies following her election triumph. For more on the latest reading and the market moves, we spoke to Mark Cranfield, Bloomberg's MLIV Strategist. Plus - we go to earnings news. In Australia, the country's biggest steel maker, BlueScope said its first half net profit more than doubled. The company signaled higher payouts to shareholders over the next 12 months. BlueScope Steel recently rejected a takeover bid by conglomerate SGH and U.S. steelmaker 'Steel Dynamics'. For more on the latest results, we heard from Tania Archibald, CEO of BlueScope. She spoke to Bloomberg's Paul Allen and Shery Ahn on the Asia Trade. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
[0:11] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Chrisner. In
[0:14] Speaker 2: the Asia Pacific, the Lunar New Year holiday is underway.
[0:18] Speaker 2: Markets on the Chinese mainland and Taiwan will be closed
[0:21] Speaker 2: for the entire week. Hong Kong and South Korea each
[0:24] Speaker 2: have three holidays in the week ahead, and Singapore will
[0:27] Speaker 2: be closed for two days. It's also holiday shortened week
[0:31] Speaker 2: in the US, where markets will be closed on Monday
[0:33] Speaker 2: to observe President's Day. Today. In Japan, the government reported
[0:37] Speaker 2: economic growth fell short of expectations at the end of
[0:41] Speaker 2: last year. This is on welcomed news for Prime Minister
[0:44] Speaker 2: Takeiichi after her recent election landslide. GDP expanded quarter on
[0:49] Speaker 2: quarter by just a tenth of one percent in Q four.
[0:53] Speaker 2: For a closer look, I'm joined by Bloomberg Markets Live
[0:55] Speaker 2: strategist Mark Cranfield. Mark joins us from our studios in Singapore.
[1:00] Speaker 2: Thank you for being here, Mark. What explains the tapid
[1:03] Speaker 2: growth in the Japanese economy right now?
[1:06] Speaker 3: Yeah, the GDP numbers are still very strong, even though
[1:10] Speaker 3: the headline missed beforecast seat, it's telling you that still
[1:14] Speaker 3: expectations are that wage hikes will continue to be pretty
[1:18] Speaker 3: firm in Japan this year. We've had a couple of
[1:20] Speaker 3: years where wage increases have been higher than inflation readings
[1:24] Speaker 3: in Japan. That's something the Bank of Japan talks about
[1:28] Speaker 3: a lot, and it's helping to drive them towards neutral rates.
[1:32] Speaker 3: Been pretty slow so far, but they're still going in
[1:34] Speaker 3: that direction. We have a meeting today between Japan's Prime
[1:38] Speaker 3: Minister Takeishi and the Bank of Japan Governor Wada that
[1:43] Speaker 3: will It's a normal kind of meeting they have on
[1:45] Speaker 3: a regular basis, but this one is probably going to
[1:48] Speaker 3: carry a bit more weight than usual because of this
[1:51] Speaker 3: situation where core inflation is not really coming down in
[1:55] Speaker 3: Japan despite a couple of rate hikes, and so Governor
[1:59] Speaker 3: Ladera will put be putting his case forward to say, look,
[2:02] Speaker 3: I still need to be pushing the interest rates towards
[2:05] Speaker 3: the neutral level, and let's see how Takichi respond. So far,
[2:10] Speaker 3: she's been pretty quiet on the subject since the election,
[2:13] Speaker 3: but this is an opportunity. If she wants to push
[2:15] Speaker 3: back against the Bank of Japan, this would be an
[2:18] Speaker 3: opportunity today.
[2:19] Speaker 2: Yeah, that was kind of amazing that fourth quarter deflator
[2:21] Speaker 2: figure rising at a rate of three point four percent.
[2:25] Speaker 2: That seems very very hard.
[2:27] Speaker 3: Yes, but if you look at the way that inflation
[2:31] Speaker 3: has stayed, particularly core inflation has stayed above headline inflation
[2:35] Speaker 3: for some time in Japan, so the warning has been there.
[2:38] Speaker 3: It's not something which just suddenly happened. It's a bit
[2:40] Speaker 3: more extreme when you look at how the quarterly GDP
[2:44] Speaker 3: numbers came in pretty soft today. There's a whole number
[2:48] Speaker 3: of factors in the background which seemed to make it
[2:50] Speaker 3: a bit of a one off. But certainly that you've
[2:54] Speaker 3: been having core inflation stay above headline infation for such
[2:57] Speaker 3: a long period of time in Japan is idio suggestion
[3:00] Speaker 3: that they haven't been tightening policy fast enough.
[3:04] Speaker 2: We have a story on the Bloomberg terminal today looking
[3:07] Speaker 2: at the shortage of memory chips, and one data point
[3:10] Speaker 2: leaped out at me. The cost of one type of
[3:13] Speaker 2: DRAM has soared seventy five percent from December to January. Mark.
[3:18] Speaker 2: That sounds really inflationary.
[3:22] Speaker 3: Yes, and you can see the side effect of that
[3:26] Speaker 3: is particularly here in Asia. We notice it a lot
[3:28] Speaker 3: with the stock market. So you have Taiwan's semiconductor Samsung
[3:32] Speaker 3: Electronics SK Heiniz, these kind of companies which are at
[3:35] Speaker 3: the forefront of producing these kind of chips. I mean,
[3:38] Speaker 3: their stocks are just performing fantastically. It's almost like an
[3:42] Speaker 3: inflation hedge. People are making sure they stay invested in
[3:45] Speaker 3: these companies to offset the risks from short squeezes in
[3:50] Speaker 3: chips and inflation in general. So that that's but you wonder,
[3:56] Speaker 3: is that kind of a bubble that's happening there, how
[3:59] Speaker 3: quickly that could be fleet if other people start to
[4:02] Speaker 3: get into the game. We're already seeing there's a little
[4:04] Speaker 3: bit of a fight between Samsung and esk Heinex because
[4:06] Speaker 3: Samsung has recently announced it's going to enter SK's territory
[4:10] Speaker 3: by producing a certain kind of chip which they hadn't
[4:13] Speaker 3: previously done, so internally there's a bit of disruption going
[4:17] Speaker 3: on as well. And then on the flip side of that,
[4:19] Speaker 3: of course, is the stories about AI software focused companies
[4:25] Speaker 3: being under threat because of rapid developments in that area,
[4:27] Speaker 3: and that makes you wonder whether demand for these things
[4:31] Speaker 3: is starting to peter out and it's going to be
[4:33] Speaker 3: as optimistic as we thought just a few weeks ago.
[4:36] Speaker 2: I'm wondering if you're a hyperscaler, and you're looking to
[4:39] Speaker 2: add data center capacity, and you've already kind of set
[4:43] Speaker 2: aside a certain sum of money that capax allocation. It
[4:47] Speaker 2: may not at the end of the day by as
[4:49] Speaker 2: much as was projected. I mean that these prices continue
[4:51] Speaker 2: to skyrocket.
[4:53] Speaker 3: It is and I mean a story which has become
[4:56] Speaker 3: to our attention just in the past couple of weeks
[4:59] Speaker 3: is that Australia has become the third largest country in
[5:04] Speaker 3: terms of places where people build data centers. It makes
[5:07] Speaker 3: sense because Australia it's got plenty of space, it's a
[5:11] Speaker 3: very underpopulated country. But that's almost like a reverse indicator signal.
[5:15] Speaker 3: If by now people chasing places to build data centers
[5:20] Speaker 3: have to go as far away as Australia, that probably
[5:22] Speaker 3: tells you the cycle is coming towards the peak.
[5:26] Speaker 2: So given the holiday that we have across the APEC
[5:29] Speaker 2: region this week, I'm sure that liquidity is going to
[5:32] Speaker 2: be very very thin, and typically that tends to exaggerate
[5:36] Speaker 2: some of the price discovery the moves that we see
[5:39] Speaker 2: in markets. If we just stay focused on the foreign exchange,
[5:42] Speaker 2: what are you expecting this week to play out?
[5:45] Speaker 3: Well, the it's unusual for traders to fight against prevailing trends.
[5:50] Speaker 3: As you say, when liquidity is a bit challenged, they
[5:53] Speaker 3: usually will just stick with what's been happening. And if
[5:56] Speaker 3: we came into this week, we generally the US dollar
[6:00] Speaker 3: a little bit on the back foot. Those CPI numbers
[6:02] Speaker 3: which came out last week suggest that the Federal Reserve
[6:06] Speaker 3: maybe closer to three rate cuts this year rather than two,
[6:10] Speaker 3: so that obviously will undermine the US dollar to some degree.
[6:14] Speaker 3: Although China is closed this week, the offshore U one
[6:17] Speaker 3: will continue to trade. It looks pretty strong. It went
[6:20] Speaker 3: into the holidays on a very very strong footing. And
[6:23] Speaker 3: then you've got the Japanese yen as well, where we've
[6:25] Speaker 3: got a number of stories on Bloomberg saying how people's
[6:28] Speaker 3: perception is becoming much more supportive towards the Japanese currency
[6:33] Speaker 3: since that the election. Takichi one on the ILDP one
[6:36] Speaker 3: by a large margin. And although in the past, or
[6:41] Speaker 3: certainly leading into elections, she was a little bit duvish
[6:44] Speaker 3: on the yen, but she's been noticeably quiet since then,
[6:48] Speaker 3: and she's allowed the experts in her party. She has
[6:52] Speaker 3: a chief currency person, and she's allowed him to speak
[6:54] Speaker 3: on behalf of the Japanese government, and it sounds as
[6:57] Speaker 3: though they're more realistic about the need for the end
[7:01] Speaker 3: to be a bit stronger because they do have inflationary
[7:04] Speaker 3: concerns in Japan as well. So all put all those
[7:07] Speaker 3: things together and it suggests that the US dollar is
[7:11] Speaker 3: on the near term path a bit lower, and it's
[7:13] Speaker 3: unlikely to be challenged in a holiday week.
[7:16] Speaker 2: It's a holiday shortened week here in the States as well.
[7:18] Speaker 2: Markets will be closed on Monday to observe President's Day.
[7:22] Speaker 2: At the end of the week, the Supreme Court is
[7:24] Speaker 2: scheduled its next opinion day. That would be Friday, the twentieth.
[7:28] Speaker 2: It's possible, not a guarantee, but it's possible the justices
[7:32] Speaker 2: will issue a ruling on the legality of President Trump's tariffs.
[7:36] Speaker 2: I'm curious is there a conversation in the APAC region
[7:39] Speaker 2: about the possibility that these tariffs could be overturned, at
[7:44] Speaker 2: least in the near term.
[7:46] Speaker 3: I think traders are a bit reluctant to do anything
[7:49] Speaker 3: in advance of this because it's an uncertainty they don't
[7:56] Speaker 3: fully understand. In fact, markets have dealt pretty well with
[8:00] Speaker 3: the tariffs that have been put in place already, and
[8:05] Speaker 3: whether it gets completely removed or whether there's some way
[8:08] Speaker 3: around it where the US administration can find another way
[8:10] Speaker 3: around it to keep effective tariffs in place. Anyway, I
[8:14] Speaker 3: think the degree of complexity around it means that most
[8:18] Speaker 3: investors in Asia, okay, we'll wait until we see the
[8:21] Speaker 3: full details of this before we make a big decision
[8:25] Speaker 3: about any trade on that. But of course, the overall
[8:29] Speaker 3: situation with tariffs compared to the threat that we had
[8:32] Speaker 3: with Liberation Day in April last year, it's a different
[8:36] Speaker 3: ballgame anyway. So much of that there's been a lot
[8:39] Speaker 3: of tariff reduction. The impact directly your markets has been
[8:42] Speaker 3: greatly reduced. So it's not the same kind of stand
[8:46] Speaker 3: up situation that we had. If we were talking about
[8:49] Speaker 3: trying to remove the full scale of Liberation Day tariffs,
[8:52] Speaker 3: it would be a completely different scenario. It's not, so
[8:55] Speaker 3: people are a little bit more relaxed about it.
[8:57] Speaker 2: Over the weekend, Beijing release the text of as speech
[9:00] Speaker 2: that President Chi Jinping delivered at the end of last
[9:03] Speaker 2: year at the Central Economic Work Conference, and he called
[9:07] Speaker 2: for anchoring economic growth around domestic demand as being the
[9:11] Speaker 2: primary driver. Obviously, this is coinciding with the Lunar New
[9:16] Speaker 2: Year holiday. There's a lot of emphasis on consumers spending
[9:19] Speaker 2: here is China had a point right now where growth
[9:24] Speaker 2: must be driven by domestic demand, otherwise it runs the
[9:28] Speaker 2: risk of maybe stagnating.
[9:30] Speaker 3: I don't think that would be a surprise to any
[9:32] Speaker 3: investors that have been following the China story really for
[9:36] Speaker 3: a couple of years. China's been moving in that direction.
[9:39] Speaker 3: That's the basis of the stimulus factors that we've seen
[9:42] Speaker 3: come into play really from the end of twenty twenty
[9:44] Speaker 3: four is all geared towards improving consumer demand in China
[9:49] Speaker 3: and producing more tech driven themes at home as well.
[9:53] Speaker 3: They've been putting a lot more into that as well.
[9:55] Speaker 3: So China's been working that way even before President Trump
[9:59] Speaker 3: was elected. So that's not going to be a surprise
[10:02] Speaker 3: to any investors. Getting traction for it is the tricky part.
[10:06] Speaker 3: It seems to be making some inroads in China, but
[10:09] Speaker 3: they're going to have to keep on working at it
[10:12] Speaker 3: because there is the Chinese consumer clearly is still a
[10:16] Speaker 3: little bit nervous that things could revert back to how
[10:19] Speaker 3: they were during the COVID period when demand just fell
[10:22] Speaker 3: off a cliff. So it's not a full level of confidence.
[10:26] Speaker 3: The government will have to keep on providing ideas. And
[10:29] Speaker 3: then at the same time you've got this price war
[10:31] Speaker 3: going on. These delivery firms, which are the big tech companies,
[10:35] Speaker 3: all have their deliveries. They'll be trying to undercut each
[10:38] Speaker 3: other with prices and that's not helping the situation either.
[10:40] Speaker 3: The government is also stepping in there to try and
[10:43] Speaker 3: make them see reason and have a more sensible playing
[10:46] Speaker 3: field for that. So there's a whole number of factors
[10:49] Speaker 3: going on. But you can't expect China to fall back
[10:53] Speaker 3: on this at all. They're going to be driving ahead
[10:54] Speaker 3: with trying to make sure that all their domestic leavers
[10:59] Speaker 3: are working. Its possible because the external environment is starting
[11:03] Speaker 3: to work against them and they know that, so they
[11:05] Speaker 3: have to really boost domestic consumption.
[11:07] Speaker 2: Mark will leave it there. It's always a pleasure. Thanks
[11:09] Speaker 2: so very much, Bloomberg Markets Live strategist Mark Cranfield joining
[11:13] Speaker 2: from our studios in Singapore here on the Daybreak Asia podcast.
[11:23] Speaker 2: Welcome back to the Daybreak Asia Podcast. I'm Doug Prisner.
[11:27] Speaker 2: We moved to Australia next, where the country's largest steelmaker,
[11:31] Speaker 2: blue Scope, said its first half net profit more than doubled,
[11:35] Speaker 2: and the company signaled higher payouts to shareholders over the
[11:38] Speaker 2: next twelve months. Now, Blue Scope Steel recently rejected a
[11:41] Speaker 2: takeover offer by conglomerate SGH and the US steelmaker Steel Dynamics.
[11:48] Speaker 2: We had the chance to catch up with the company CEO,
[11:50] Speaker 2: Tanya Archibald. Tanya spoke to Bloomberg TV host Sherry On
[11:54] Speaker 2: and Paul Allen, and the conversation began with a question
[11:57] Speaker 2: about the takeaway for shareholders when it comes to those payouts.
[12:02] Speaker 4: I think the message that we're trying to send is
[12:04] Speaker 4: that we're coming towards the back end of a very
[12:07] Speaker 4: large capital investment program that's been running for quite a
[12:09] Speaker 4: number of years, and as we go into the new era,
[12:12] Speaker 4: what we're doing is ramping down that capital send, ramping
[12:16] Speaker 4: down that capital spend, and ramping up the returns to shareholders.
[12:19] Speaker 4: So we're very, very focused on putting value into the
[12:22] Speaker 4: hands of our shareholders. And as you point out, what
[12:24] Speaker 4: we're aiming to do, planning to do for this calendar
[12:27] Speaker 4: year is put three dollars a share into the hands
[12:29] Speaker 4: of our shareholders.
[12:32] Speaker 5: Yeah, we can't look away from those takeover bids because
[12:35] Speaker 5: there have been a few over the years as well,
[12:38] Speaker 5: So I'm just curious, would you entertain higher offers down
[12:40] Speaker 5: the track from SGL or Steel Dynamics or any other
[12:44] Speaker 5: suitors on the horizon.
[12:48] Speaker 4: Oh.
[12:48] Speaker 6: Look, we always have to.
[12:52] Speaker 4: Value out and consider any offers that might come our way,
[12:55] Speaker 4: and we're always open to any option that realizes value
[13:00] Speaker 4: for our shareholders.
[13:01] Speaker 6: But at the end of the day, we're getting on
[13:03] Speaker 6: with it. We're not sitting around waiting.
[13:04] Speaker 4: For bids to materialize. We have a great company. We
[13:08] Speaker 4: have a great program of initiatives with our cost production plans,
[13:12] Speaker 4: with our growth plans, with accelerating the delivery of value,
[13:16] Speaker 4: and again with the ramping down of the capital spend
[13:19] Speaker 4: that gives us the capability to ramp up those returns
[13:21] Speaker 4: to shareholders and rebasing those returns higher.
[13:26] Speaker 1: How are higherer of your costs impacting your business so far?
[13:34] Speaker 4: So? Energy costs certainly have an impact across any manufacturer,
[13:40] Speaker 4: and it's really part of the ongoing cost and productivity
[13:43] Speaker 4: programs that we run right across the portfolio. You've got
[13:46] Speaker 4: to be highly competitive to be a successful manufacturer, and
[13:49] Speaker 4: it's one of the many challenges that we face. But
[13:53] Speaker 4: we are a highly competitive manufacturer, and I think that
[13:56] Speaker 4: points to the quality of the earnings that came through
[13:59] Speaker 4: in the last half, the five hundred and fifty eight
[14:02] Speaker 4: million dollars of underlying EBIT, and again to your point
[14:05] Speaker 4: in the recap, the outlook for the next half around
[14:08] Speaker 4: six hundred and twenty to seven hundred million dollars of EBIT.
[14:11] Speaker 4: These are challenges that we deal with as a very
[14:14] Speaker 4: successful manufacturer.
[14:18] Speaker 1: What's an outlook for seale demand? Then?
[14:25] Speaker 4: I think the outlook for steel demand is reasonably robust.
[14:28] Speaker 4: I mean, it's a cyclical industry just by its very
[14:30] Speaker 4: nature in terms of clicks of capital that can come online.
[14:34] Speaker 6: So we do deal with those cycles.
[14:36] Speaker 4: But at the end of the day, steel is a
[14:38] Speaker 4: fundamental part of everyday life. It's got a critical role
[14:40] Speaker 4: to play in the energy transition. Steel's not going anywhere.
[14:45] Speaker 4: There's lots of interesting conversation and work going on over
[14:48] Speaker 4: time around lower emissions steel, but there's a long way
[14:52] Speaker 4: to go in that process. So we see a very
[14:54] Speaker 4: healthy outlook for steel, including in our core markets in Australia,
[15:00] Speaker 4: New Zealand, Asia and the US.
[15:04] Speaker 5: So how are you balancing that outlook that expected increase
[15:07] Speaker 5: in demand and plans for future growth versus those other
[15:12] Speaker 5: plans to continue returning cash to shareholders.
[15:18] Speaker 4: So the capital program that we've been undertaking for many
[15:21] Speaker 4: years has been at an elevated level.
[15:23] Speaker 6: Of course, we've been working our way.
[15:25] Speaker 4: Through the reline of the Number six blast furnace in Australia,
[15:28] Speaker 4: so that's consumed a higher level of capital than you
[15:32] Speaker 4: would normally see in our history. We've got plenty of
[15:35] Speaker 4: capacity to fund ongoing growth, it's just not necessarily going
[15:39] Speaker 4: to be at the magnitude of the very large projects
[15:41] Speaker 4: that we've been undertaking in the next couple of years.
[15:44] Speaker 4: So we're very comfortable with our growth pipeline, our ability
[15:47] Speaker 4: to fund that growth pipeline and also make sure that
[15:50] Speaker 4: we have a healthy balance sheet.
[15:54] Speaker 5: We had to report from the Financial Times towards the
[15:56] Speaker 5: end of last week that President Trump might be considering
[15:59] Speaker 5: lowing lowering some steel tariffs aluminium tariffs as well. But
[16:03] Speaker 5: one of the implications for blue Scope here are considering
[16:06] Speaker 5: you do produce this very significant proportion of your steel
[16:09] Speaker 5: inside the US.
[16:14] Speaker 4: I think it's a bit of a peripheral issue. Quite frankly, Yes,
[16:18] Speaker 4: I did see those headlines. I believe based on the reports,
[16:22] Speaker 4: and I think a lot of them are a little
[16:23] Speaker 4: bit speculative.
[16:24] Speaker 6: It's actually in relation to derivative products.
[16:28] Speaker 4: Some which have lower levels of steel might have a
[16:31] Speaker 4: lower tariff, and then other products which have a higher
[16:33] Speaker 4: component of steel might have a higher level. But at
[16:36] Speaker 4: the end of the day, our assets, and particularly the
[16:39] Speaker 4: north Star asset in the US, it's a wonderful asset.
[16:42] Speaker 4: It doesn't compete on the basis of tariffs. It's one
[16:45] Speaker 4: of the best minimals in the US. It's well located,
[16:49] Speaker 4: it has a fantastic cost base, a very very productive team,
[16:53] Speaker 4: and really the noise around tariff's tariffs come, tariffs go.
[16:57] Speaker 6: That's the reality of what we deal with as a
[16:59] Speaker 6: Manu facturer.
[17:01] Speaker 4: We've got a fantastic asset, so very much a brutal
[17:03] Speaker 4: issue in my mind.
[17:06] Speaker 5: Would you be looking to increase your exposure in North
[17:09] Speaker 5: America as well, and are there any assets there that
[17:12] Speaker 5: would fit well with your portfolio?
[17:17] Speaker 4: We are certainly looking to increase our exposure in the US.
[17:21] Speaker 4: We've got a healthy pipeline, we've got an ongoing expansion program. Again,
[17:25] Speaker 4: so we put in the major expansion a couple of
[17:27] Speaker 4: years back at Allstar where we took it from two
[17:30] Speaker 4: point one to just under three million tons metric tons.
[17:32] Speaker 6: I'm talking.
[17:33] Speaker 4: We've got another expansion program underway to take it up
[17:36] Speaker 4: to three point three. We think we can further increase
[17:39] Speaker 4: it from there. We're also looking at growing our premium
[17:43] Speaker 4: branded position in the US. Of course, blue Scope is
[17:46] Speaker 4: one of the world's leading coders and painters of steel
[17:49] Speaker 4: and so we think we've got a fantastic position upon
[17:51] Speaker 4: which to build. So we do see significant growth opportunities
[17:55] Speaker 4: over time in the US. A lot of it though
[17:57] Speaker 4: we believe will be pursued through organic means.
[18:03] Speaker 1: I tell us a little bit more about the flagship
[18:04] Speaker 1: projects in the US and the bright spots there.
[18:12] Speaker 4: So the key projects in the US, I think if
[18:14] Speaker 4: I heard you correctly, so we're expanding north Star again.
[18:18] Speaker 4: So that's the program that's under way. The incremental capacity
[18:21] Speaker 4: of three hundred thousand tons. We think we can go
[18:24] Speaker 4: beyond that, but we're focused on the three hundred thousand
[18:26] Speaker 4: tons delivery at the moment. And then of course there's
[18:29] Speaker 4: the expansion of Coded and Painted. We have wonderful positions
[18:33] Speaker 4: in Coded and Painted in Australia, New Zealand and Asia.
[18:36] Speaker 4: We think there's a large market or we can see
[18:38] Speaker 4: a large market in the US, and we're very keen.
[18:41] Speaker 6: To tap into that market further.
[18:45] Speaker 1: A couple of years ago, you announced a joint venture
[18:47] Speaker 1: with bhpn Rio when it comes to reducing emissions and steelmaking.
[18:51] Speaker 1: How is that progressing and are you seeing a shift,
[18:54] Speaker 1: especially with the likes of the Trump administration not necessarily
[18:57] Speaker 1: so focused on clean energy.
[19:01] Speaker 4: Yes, So what you're referring to there is the Neo
[19:04] Speaker 4: Smelt joint venture. Blue Scope is the leading partner within
[19:08] Speaker 4: that joint venture. We're working with bohp Rio, Tinto, Mitsui
[19:12] Speaker 4: and Woodside. It's a very large R and D project
[19:15] Speaker 4: and what the intent of that project is to do
[19:18] Speaker 4: is to understand how you can use the pilver ores
[19:21] Speaker 4: Australi as pilbra ores in a.
[19:24] Speaker 6: Direct reduced iron technology.
[19:26] Speaker 4: So that's potentially a lower emissions form of iron making.
[19:30] Speaker 4: With natural gas you can get around a sixty percent
[19:33] Speaker 4: reduction in emissions. If you have green hydrogen you get
[19:36] Speaker 4: closer to one hundred percent.
[19:39] Speaker 6: It's a very large, again R and D project.
[19:42] Speaker 4: We're working our way through the feasibility stage and we'd
[19:45] Speaker 4: be looking to make a decision about whether or not
[19:47] Speaker 4: to progress to a pilot towards the back end of
[19:50] Speaker 4: this year.
[19:53] Speaker 5: You're also upgrading some of your other steel works up
[19:55] Speaker 5: Paul Kamberer Glenburg as well with a reliance on green technology.
[20:00] Speaker 5: Can you give us a sense of where you are
[20:03] Speaker 5: with that, particularly in terms of meeting timelines.
[20:09] Speaker 4: So the steel works in New Zealand has actually been
[20:13] Speaker 4: one of our highest emitting assets, and what we've done
[20:16] Speaker 4: in conjunction with the New Zealand government is we're installing,
[20:19] Speaker 4: with their support, we've been installing an electric arc furnace.
[20:22] Speaker 6: So we're going to shut.
[20:23] Speaker 4: Down half of existing iron and still making capacity at
[20:27] Speaker 4: New Zealand and replace it with an EAF that enables
[20:31] Speaker 4: us to have much more flexible operating conditions. We've got
[20:35] Speaker 4: a reset in our energy contracts and we end up
[20:37] Speaker 4: with a lower missions product. So we're very comfortable with
[20:40] Speaker 4: the approach that we're taking in New Zealand. But it's
[20:43] Speaker 4: a relatively smaller scale to what we have in Australia,
[20:46] Speaker 4: and so that's why in Australia we think that the
[20:48] Speaker 4: pathway towards lower mission's iron and steelmaking is more around
[20:52] Speaker 4: the direct reduced iron technology route. We do think it's
[20:55] Speaker 4: some way off, and that's why we're engaging with the
[20:57] Speaker 4: Neo Smelt joint venture. The technology needs to be proven
[21:01] Speaker 4: out and then of course you need to have a
[21:03] Speaker 4: commercial business case to make sure that the spend that's
[21:07] Speaker 4: required to fund that change in the iron and still
[21:10] Speaker 4: making technology.
[21:11] Speaker 6: Can be paid for.
[21:12] Speaker 4: So I think we're probably at least a decade away,
[21:16] Speaker 4: if not more, in terms of having a change in
[21:19] Speaker 4: iron and still making technology in this country.
[21:23] Speaker 2: That was Tanya Archibald, the CEO of blue Scope Steel,
[21:26] Speaker 2: speaking with Bloomberg TV host Paul Allen and Sherry On
[21:29] Speaker 2: and we're bringing it to you here on the Daybreak
[21:31] Speaker 2: Asia Podcast. Thanks for listening to today's episode of the
[21:37] Speaker 2: Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
[21:41] Speaker 2: the story shaping markets, finance, and geopolitics in the Asia Pacific.
[21:46] Speaker 2: You can find us on Apple, Spotify, the Bloomberg Podcast
[21:49] Speaker 2: YouTube channel, or anywhere else you listen. Join us again
[21:52] Speaker 2: tomorrow for insight on the market moves from Hong Kong
[21:56] Speaker 2: to Singapore and Australia. I'm Doug Prisoner. This is Bloomberg

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