In the DRIver's seat
Feb 28, 2014 | 07:00 PM
| Gregory DL Morris
As several possible producers assess their proposed investments in direct-reduced iron (DRI), steelmakers are carefully recalculating all of the variables in their recipes and in their economic models for inputs.
Analysts have forecast annual demand of anywhere from 8 million to 12 million tonnes in the United States--and, indeed, about that much has been planned. But beyond the startup of Charlotte, N.C.-based Nucor Corp.s DRI facility in St. James Parish, La., late last year, no greenfield capacity will be built for more than a year, so steelmakers will have time to refine their calculations.
Today we have roughly 12 million (tonnes) proposed or planned, but I think 10 million (tonnes) per year actual demand might be a bit on the high side, said Ralph Smailer, director and owner of Pittsburgh-based Metserv Metallurgical Consulting. If all the proposed production were built, that would translate to an 80-percent operating rate--a fair number. The actual demand for DRI has just as much to do with the level of scrap exports and quality grades as it does with the pure price of scrap or DRI itself. There has been a huge increase in export demand for scrap from the United States, he said.....
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