Posted on 27 Jun 2024
The shortage of high-grade iron ore pellet is likely to limit the expansion of direct reduced iron-based green steelmaking capacity, although this could be alleviated by using alternative technology to upgrade lower-quality ore. Seaborne DRI/HBI trade is meanwhile set to boom, which could necessitate a change in shipping regulations, says International Iron Metallics Association (IIMA) secretary general John Atherton.
International DRI/HBI trade was 8.2 million tonnes in 2022, according to the latest-available data, only 7.6% of global DRI/HBI production. Exports in 2023 are set to suffer a setback, while 2024 will remain subdued given weak steel demand, Russia sanctions and Red Sea issues. US steelmakers will meanwhile continue to favour pig iron over DRI/HBI for the next decade amid significant new domestic electric arc furnace capacity buildout, according to Atherton.
An additional 74 million tonnes/year of pellet supply will be needed to feed the DRI plants slated to come online, resulting in a pellet shortfall of 18mt in 2033. “What this tells us is that whilst we can savour the prospect of carbon-neutral steelmaking, this will only happen if there is high-grade pellet supply available,” Atherton said at this week’s Fastmarkets International Iron Ore & Green Steel Summit 2024 in Vienna attended by Kallanish.
Alternative technology that upgrades the quality of iron ore feed may help mitigate this challenge, he added.
The creation of metallics “mega hubs” in the Middle East is garnering interest. With the addition of carbon capture utilisation and storage, the region will be a “fertile area” for cost-efficient and future-proof production of DRI, Atherton noted.
Seaborne DRI/HBI trade is set to balloon 13-fold by 2030. Changes in the physical form and reactivity of HBI arising from hydrogen-based reduction may necessitate a revision of maritime shipping regulation to ensure continued safe access to HBI for the market, he continued. IIMA is exploring any potential changes with partners.
Due to its growing requirement for low-emission steelmaking, meanwhile, high-grade iron ore should be classified in Europe as a critical raw material as it has been in Canada, Atherton said.
Brazilian biochar-based pig iron is already green, he pointed out, but production represents a very small volume compared to overall metallics requirement. The resources needed to increase production, moreover, are limited. Brazilian green pig iron is also used primarily in the US, which already has a low-emission profile, Atherton concluded.
Source:Kallanish
