Platts Scrap Seminar: DRI to Have Little Impact on Scrap Markets
03/18/2014 - The North American scrap market will see little short- to medium-term effects as a result of the increasing usage of direct reduced iron (DRI), according to speakers at Platts’ 3rd annual Scrap Seminar, held in Chicago on 18 March 2014.
Angelo Maneti, vice president, North America business development of Tenova, said the impact of DRI on the scrap market will be very limited and negligible, taking into account the quantity produced and the fact that there will be only limited availability of DRI on the merchant market. By the end of the decade, he estimates that annual DRI production in the U.S. could reach 10 million tons, up from its present 2.5 million tons. He pointed out that Nucor, whose new Tenova HYL DRI module began production late in 2013, will be using its DRI internally. The majority of foreseen U.S. production will also be controlled directly by steel mills, and most of it will be used internally, or has already been sold under contract (such as voestalpine’s DRI facility under construction in Texas, which has already committed to selling most of the DRI not used internally by the company to Mexico’s AHMSA).
Scrap will remain the raw material of choice for EAF producers, said Lynn Lupori, managing consultant at Hatch Consulting, but she noted that an increasing use of DRI and hot briquetted iron (HBI) may be seen by steelmakers who want to produce higher quality materials. The main advantage DRI has over scrap is the ability for steelmakers to control residuals, she said, and a steelmaker is only going to use as much DRI as it needs to get the chemistry right, as there are limitations on how much of it they can use in a furnace. As a result, she said, EAF producers will still look to scrap to be the primary feedstock for their furances.
While the impact of DRI on scrap could be limited, Maneti noted, however, the pig iron consumption will be significantly affected by DRI’s increased availability, as 4% carbon DRI is a natural substitute for pig iron. Pig iron is one of the more expensive metallics to buy, so substituting high-carbon DRI will generate significant cost savings for steelmakers, he said, noting that this will vary depending on the region of the world.
This article was written by Laura Miller, AIST industry news editor.
Scrap will remain the raw material of choice for EAF producers, said Lynn Lupori, managing consultant at Hatch Consulting, but she noted that an increasing use of DRI and hot briquetted iron (HBI) may be seen by steelmakers who want to produce higher quality materials. The main advantage DRI has over scrap is the ability for steelmakers to control residuals, she said, and a steelmaker is only going to use as much DRI as it needs to get the chemistry right, as there are limitations on how much of it they can use in a furnace. As a result, she said, EAF producers will still look to scrap to be the primary feedstock for their furances.
While the impact of DRI on scrap could be limited, Maneti noted, however, the pig iron consumption will be significantly affected by DRI’s increased availability, as 4% carbon DRI is a natural substitute for pig iron. Pig iron is one of the more expensive metallics to buy, so substituting high-carbon DRI will generate significant cost savings for steelmakers, he said, noting that this will vary depending on the region of the world.
This article was written by Laura Miller, AIST industry news editor.
