Chris Barrington, International Iron Metallics Association (IIMA) secretary general, summarizes recent changes in the pattern of supply of ore-based metallics (pig iron, HBI, DRI) over the past couple of years.
In the USA, where, in 2016, 67% of steelmaking was via the EAF route, some steelmakers have aimed to secure captive supply. Nucor, for example, has its own DRI plants, in Trinidad and Louisiana. Austrias Voestalpine has also seen the attractions of producing HBI in the USA, where its 2 million tpy plant in Corpus Christi, Texas, was set up to supply about half its output to the companys plants in Europe and the balance to customers in North America. Several more HBI projects are planned for the Great Lakes region, for example Cleveland-Cliffs 1.6 million tpy plant in Toledo, Ohio.
Russia, Venezuela and Libya are important contributors to the global HBI picture, although supplies from the latter two, especially Venezuela, have been impacted by political and economic developments. Once the major global supplier of HBI, Venezuelas annual production has fallen to about one million tonnes which compares with nameplate capacity of almost 7 million tonnes. The gap has been filled by Russias Lebedinsky GOK, which has progressively increased its capacity to 4.5 million tpy, as well as by Nucors 2.5 million tpy plant in Louisiana (which produces DRI rather than HBI).
The Middle East steel industry continues to be a prominent consumer, and producer, of DRI, but it has not been immune from an on-going international shortage of DR pellet. The continued suspension of supply from Samarco in Brazil is still contributing to an increasingly tight DR pellet market. The pressure may be eased somewhat when Vale brings its idled São Luis and Tubarão lines back on line. The timing of Samarcos restart is subject to speculation and the eventual level of pellet production and split between grades is also an open question.
Meanwhile, Chinas drive to improve the environmental performance of its heavy industries has seen both a flight to quality steelmaking raw materials, and thus increased demand for higher grades, while it has been shutting down the dirtiest sinter and pellet plants in the country.
Global cross-border trade in pig iron is about 12 million tpy of all grades (basic, foundry and nodular), making it a relatively small market, with variable grades of material within that total. The phosphorus content in basic pig iron sourced from the north and south of Brazil is different, for example, typically 0.1% max. from the North, up to 0.15% max. in the South. Whilst the Chinese market for merchant pig iron is probably several times that of the rest of the world put together, it is essentially a domestic market with a small volume of imports and exports at the margins.
Since the World Steel Association (Worldsteel) forecasts an increase of about 26 million tonnes in steel demand outside China in 2018 over 2017, or about 3%, the demand for ore-based metallics will remain robust in 2018. Longer term, the inevitable rise in use of scrap in both EAFs and BOFs in China, will also encourage greater use of ore-based metallics for their value in diluting unwanted tramp elements for basic products or as essential feedstock materials for the production of flat steel products.