NEW ORLEANS U.S. demand for metallics-based raw materials like pig iron, hot-briquetted iron (HBI) and direct-reduced iron (DRI) will continue to grow this year due to more-affordable energy costs and growing steel demand, according to Frank Griscom, secretary of the International Iron Metallics Association.
"Looking at the U.S. metallic imports, we imported about 5.5 million metric tonnes of these materials in 2010 and that gradually increased to 6 million tonnes in 2011," Griscom told delegates Wednesday at the Critical Commodities Conference in New Orleans. "Were looking for a strong year in 2012 as the flat-products industry continues to improve."
Griscom highlighted the importance of metallics-based raw materials, which allow the creation of higher-grade steel products compared with ferrous scrap.
"Ferrous input material used to make steel materials is broadly grouped under steel scrap or ore-based metallics," he said. "As a result, ore-based metallics are often called scrap substitutes. But they are actually supplements and add value beyond the basic price of iron units."
Major international producers of HBI include Russia, India, Qatar and Venezuela. Mills in India and Qatar export large amounts of HBI when the markets are doing well, Griscom said.
However, supply is constrained by global demand factors such as growing Chinese demand for imported metallics, the availability of low residual scrap and the impact of increased domestic demand in Russia.
Venezuela has historically been the United States major supplier of HBI. But in recent years those numbers have decreased dramatically due to shifts in economics and government policy. But that could change in the near future due to newly reduced regulations, new investments and government plans to increase production to some 4.5 million tonnes in 2012.
Metallics could gain importance this year, particularly due to a number of major U.S. steel mills buying ore-based facilities, Griscom added.
Nucor Corp., Charlotte, N.C., is constructing a DRI plant in Louisiana. The company said late last month that construction on the facility, which will have an annual capacity of some 2.5 million tons when completed in 2013, is progressing (AMM, March 22). Earlier this year, Severstal North America Inc., Dearborn, Mich., also said it would conduct a feasibility study on the construction of a DRI plant in Trinidad and Tobago (AMM, Jan. 11).
"How much of this capacity will be realized?" Griscom asked. "Will there be enough scrap and ore to meet the (electric-arc furnace) industry? Only time will tell."