Raw materials suppliers prepare for the DRI age

Jun 26, 2013 | 07:00 PM | Bill Beck

Tags  iron ore, metallurgical coal, electric-arc furnace, ferrous scrap, reduced iron products, DRI, Cliffs Natural Resources Inc., Joseph Carrabba Peter Kakela

Firms that supply metallics to the steel industry are devising strategies to deal with declining demand from steelmakers in North America, Europe and China.

Demand for finished steel mostly recovered following the global recession, but it has been losing ground since the fourth quarter of 2012. That slippage poses strategic challenges for the natural resource companies that supply iron ore and metallurgical coal to the global steel industry. And from the looks of it, U.S. firms are looking far and wide to find ways to blunt the impact of declining demand both domestically and overseas.

Suppliers are constrained by the fact that integrated steelmakers consume iron ore, metallurgical coal and limestone, while electric-arc furnace (EF) mills consume ferrous scrap or reduced iron products. Suppliers must deal with a decline in demand that is forcing diversification of product lines or geographic markets. Both strategies are currently being employed by some of the major suppliers in the United States.

Cliffs Natural Resources Inc. chairman, president and chief executive officer Joseph Carrabba said the Cleveland-based company is making real progress on its direct-reduced iron (DRI) project in Minnesota.

Cliffs, one of the United States’ largest producers of iron ore, has been experimenting for about a year with converting taconite pellets in Minnesota to DRI-grade pellet suitable for firing in EF steel mills. “It’s not so much an ‘if’ but a ‘when,’” P. Kelly Tompkins, Cliffs’ executive vice president of legal, government affairs and sustainability, told local media.....

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