voestalpine Sees Significant Interest in Its Texas HBI
05/29/2013 - The first customer of voestalpine's new HBI facility being built in Texas has signed a memorandum of understanding (MoU) to purchase HBI.
In March the decision was taken to locate the voestalpine Group's direct reduction plant on the La Quinta Trade Gateway in San Patricio County, just outside the city of Corpus Christi, Texas. The plant is designed for an annual capacity of 2 million tons of HBI (hot briquetted iron) and has direct deep-sea access to the Gulf of Mexico. There is significant interest from potential customers in the sponge iron produced at the plant. Now the first potential customer has signed a memorandum of understanding (MoU) to purchase HBI. From 2016 onwards, Altos Hornos de Mexico (AHMSA), Mexico's largest steel manufacturer, will source several hundred thousand tons of high quality HBI from the new voestalpine location annually.
voestalpine is investing € 550 million in the new direct reduction plant in Texas. When fully operational the plant, with 150 employees, will produce 2 million tons of highest quality HBI, a pre-material for steel production. Only two months after announcing this, it has been possible to sign a MoU with the first customer, AHMSA, concerning a long-term delivery partnership.
"We are delighted with this successful entry into the market and the quick agreement with the AHMSA Group. In so doing, we have achieved an important step in establishing a successful and sustainable business relationship," said Wolfgang Eder, chairman of the management board of voestalpine AG.
With the MoU now signed, the Mexican steel company is securing long-term access to high quality pre-materials for its mill in Monclóva. The company has recently increased its existing crude steel capacities by around 40%. This allows voestalpine, which itself will require half of the plant's output for its locations in Europe, to guarantee stable demand for a very substantial part of the remaining half.
