Goncalves: Cliffs Determined to Build DRI Plant
10/27/2016 - Saying that his company's future growth will depend on its ability to supply America's electric arc furnaces, Cliffs Natural Resources chief executive Lourenco Goncalves promised to build a direct reduction plant somewhere in the Great Lakes region.
"This is absolutely our next logical strategic step, and I will not stop in the next few years until we are there," Goncalves told analysts during a conference call Thursday to discuss the company's third quarter earnings. "We have been exploring this option with potential partners, and are encouraged by the progress we have made."
Goncalves said he believes electric arc furnace operators will be looking for scrap alternatives for two reasons. One, he said, is that they'll need a better feedstock if they are to move further into production of higher-value steel products, such as those demanded by automakers.
Secondly, he said he foresees shifts in the scrap market, with China becoming a bigger consumer and competing with American steelmakers for supply. Therefore, scrap alternatives will become attractive, he said.
At the same time, he said he doesn't believe the integrated mills will be installing new blast furnaces.
"I believe that DRI-fed EAFs are the future of steelmaking in this country, and Cliffs will play an active part in this process," he said.
Goncalves said he believes electric arc furnace operators will be looking for scrap alternatives for two reasons. One, he said, is that they'll need a better feedstock if they are to move further into production of higher-value steel products, such as those demanded by automakers.
Secondly, he said he foresees shifts in the scrap market, with China becoming a bigger consumer and competing with American steelmakers for supply. Therefore, scrap alternatives will become attractive, he said.
At the same time, he said he doesn't believe the integrated mills will be installing new blast furnaces.
"I believe that DRI-fed EAFs are the future of steelmaking in this country, and Cliffs will play an active part in this process," he said.
