NEW YORK The metallics
sector foresees growth in the years ahead on the back of
technological advancements, affordable natural gas and renewed
interest from steelmakers.
iron, hot-briquetted iron (HBI) and direct-reduced iron
(DRI)might be unconventional raw materials for
steelmaking, but considerable technological advancements in the
past decade have created renewed interest and even market
investment on the promise of a good return, sources said.
"Over the years, we have,
through market development activities and seminars, tried to
increase the perception of these raw materials," International
Iron Metallics Association (IIMA) secretary-general Frank
Griscom told AMM. "Theyre not just a source of
iron. We want people to look at these materials in light of the
overall charge mix theyre putting into their furnaces and
how to achieve the specs and how to achieve the lowest-cost
liquid steel. These ore-based metallics ... have piggybacked on
the movement of the electric furnace for higher-quality
Griscom, who has worked at DRI
producer Midrex Technologies Inc. for more than two decades, is
retiring as IIMAs secretary-general and will be succeeded
by Stuart Horner, managing director at F.W. Hempel Metals UK
amm.com, Dec. 11).
Metallics have one major benefit
over mini-mill-driven ferrous scrap: dilution. While melting
scrap might include alloys that are difficult to remove during
recycling, adding HBI or DRI can help improve steel
"Steelmakers are adding small
amounts of various elementslike copper, titanium,
vanadiumto make microalloy or high-strength low-alloy
steels. ... These elements will likely be carried in
ferrous scrap and charged back into furnaces. And steelmakers
may very well want a certain amount of copper in their steel,
but they dont want to be restricted by the ferrous scrap
they have to charge," Horner told AMM. "Metallics
allow steelmakers to dilute, which allows the steelmakers the
flexibility they need. We have to recognize that ferrous scrap
in the steelmaking charge will give you problems at the end of
U.S. steelmakers appear to be
taking the option to heart. Charlotte, N.C.-based steelmaker
Nucor Corp. is building a $750-million DRI facility in St.
James Parish, La. (
amm.com, May 7, 2011); Dearborn, Mich.-based
Severstal North America Inc. is conducting a feasibility study
on the construction of a potential DRI project in Trinidad and
Tobago in an effort to expand its vertical integration (
amm.com, Jan. 10, 2012); and U.S.-Australian joint
venture North Star BlueScope Steel LLC is mulling a DRI project
amm.com, Aug. 21).
The emergence of shale gas,
which many call a game-changer, also might play into the
metallics sector. Supporters of shale gas say that affordable
natural gas could allow for more competitive steelmaking, and
also might boost the metallics sector.
"We have an interesting
development right now because we have another wave of
direct-reduction interest in the United States. Shale gas is
promising some moderate gas prices longer term, which is what
you really need to have a direct-reduction industry in any
country," Griscom said. "From a merchant standpoint, we look on
this as a benefit. The more DRI or HBI or pig iron used in the
U.S. creates increased demand, and we feel that the demand will
grow greater than the installed plants. Its the prospect
it offers thats so intriguing."
However, Griscom and Horner said
that metallics arent intended to displace scrap, instead
allowing steelmakers and iron casters more flexibility when
choosing their raw materials.
"At the end of the day,
its not necessarily the cost per iron unit going in
thats going to yield you the lowest cost for liquid
steel. Thats what our message is. Were not
competing with scrap; were a supplement to scrap,"
Moving forward, the IIMA aims to
build stronger relationships with steelmakers internationally,
including engaging U.S. and Asian electric-arc furnace (EF)
"Weve made a point to
develop relationships that are key, such as with the Steel
Manufacturers Association. We (also) have a number of customers
primarily in the iron ore business in Australia as part of our
organization. Were in touch with a number of Chinese
traders. We have a longstanding relationship with the (South
East Asia Iron and Steel Institute)," Griscom said.
Chinas EF sector will be
"part of the future," he said, adding that its important
for the organization to tap into that market.
Horner agreed that much of the focus will be geared toward
Asia. "We recently met with the director of the China Iron and
Steel Association, and theyre very keen to get better
acquainted," he said. "My job is to keep operations running,
raise our profile and expand."