Metal Bulletin Events 2 nd World DRI & Pellet Congress. Ritz-Carlton - Abu Dhabi. April 2014

Transcription

1 Metal Bulletin Events 2 nd World DRI & Pellet Congress Ritz-Carlton - Abu Dhabi. April 2014

2 Metallics Compared Stuart G Horner Secretary General International Iron Metallics Association 2

3 Disclaimer This presentation is intended for information purposes only and is not intended as commercial material in any respect. The material is not intended as an offer or solicitation for the purposes of sale of any financial instrument, is not intended to provide an investment recommendation and should not be relied upon for such. The material is derived from published sources, together with personal research. No responsibility or liability is accepted for any such information of opinions or for any errors, omissions, misstatements, negligence or otherwise for any further communication, written or otherwise.

4 Topics International Iron Metallics Association? What are Ore Based Metallics? Ore Based Metallics Market Benefits to steelmakers in using DRI /HBI or Pig Iron 4

5 IIMA ORIGIN HBIA (Hot Briquetted Iron Association) IPIA (International Pig Iron Association) 5

6 PRINCIPAL OBJECTIVES Provide value for members Sustain & grow membership

7 PURPOSES PROMOTE The use of ore-based metallics in steel production and iron casting COLLECT & PRESENT Trade statistics and Industry data REPRESENT The collective interest of members PROVIDE A forum for technical co-operation and exchange of views 7

8 SPANNING THE SUPPLY CHAIN Diverse Membership... Unified Presence Producers of DRI, HBI, Iron Nuggets, and Merchant Pig Iron Traders/Distributors of metallics Suppliers of iron ore, energy/reductants, process technology, proprietary equipment, transportation and logistics services, know-how, etc. Individuals whose careers have contributed to furthering the industry Meeting with AIIS Management - Nov 7,

9 IIMA MEMBERS > 100 members in 36 countries Meeting with AIIS Management - Nov 7,

10 Committee Projects Technical Value in Use of ore-based metallics Use in EAF guides MPI & HBI/DRI Transportation & Handling MPI, DRI/HBI SHARE Health & Safety International Maritime Organisation [IMO] REACH/CLP/GHS, etc. Environment Marketing & Communications The voice of ore-based metallics Product support & promotion Literature Website Statistics Trade data and analysis MPI, DRI/HBI, ore, scrap Merchant metallics trade Supply Demand analysis [future project] 10

11 What are Ore Based Metallics? 11

12 What are Ore Based Metallics? Merchant Pig Iron, HBI and DRI Manufactured directly from iron ore or Titanium bearing ores/sands OBMs are not SCRAP SUBSTITUTES OBMs are best used as SCRAP SUPPLEMENTS to dilute impurities in ferrous scrap in EAF steelmaking OBMS are PRODUCTIVITY ENHANCERS in BF iron making and BOF steel making 12

13 How are Ore Based Metallics Used? Primary Feed Material for EAF Areas where scrap availability is limited Supplemental Feed Material for EAF Dilutes residuals in scrap to achieve specifications for flat products, wire rod, and special bar quality or engineering steels Allows use of lower scrap grades for basic long products to achieve lowest cost/ton of liquid steel Cold Charge for BOF Areas where hot metal, scrap are limited Trim Coolant for BOF Adds Fe units, reduces slag volume (vs. flux materials) Precise temperature control, predictable mass & heat balances Supplemental Charge for BF Adds Fe units, increases productivity (vs. limestone) Reduces coke rate, lowers CO 2 emissions 13

14 Ore Based Metallics Market 14

15 Ore-based metallics market 2013 DRI/HBI total MPI cross border MPI domestic [excl. China] MPI China domestic mt 12 mt 9-10 mt mt Total mt Source: Midrex, IIMA, ISSB 15

16 World DRI Production 16

17 Merchant DRI/HBI Production Capacity 2013 Libya 1.75 mill t Russia 2.3 mill t Qatar 1.5 mill t India 1.5 mill t Malaysia 2.44 mill t Trinidad & Tobago 3.6 mill t Venezuela 6.9 mill t 20 millions tonnes approx. 17

18 2013 Global HBI/DRI Trade 9 million tonnes (est.) 9 million tonnes est. 18

19 DRI/HBI Market 76% of DRI is produced in gas based shaft furnaces, 23% - coal based (mainly India) Further development of shaft furnace Direct Reduction technology: availability of gaseous reductant (natural gas, shale gas, synthetic gas) and iron ore of suitable quality. New DR capacities in MENA and India have been developed as a part of integrated steel mills. Direct Reduction in the USA: Nucor Louisiana 2.5 mtpy DRI, December 2013; Voest Alpine Stahl, Texas 2.0 mtpy HBI, 2016; several projects under discussion. Direct Reduction, Russia: Metalloinvest LebGOK 1.8 mtpy HBI; total HBI capacity in mtpy. 19

20 Merchant Pig Iron Supply Tulachermet 3.0 mtpy [1.8 mt in 2010] Kosaya Gora 0.7 mtpy [0.3 mt in 2010] Svobodny Sokol 0.8 mtpy [0.4 mt in 2010] Donetsksteel 0.6 mt in 2010 Ural Steel 0.9 mt in 2010 NMLK Lipetsk 0.6 mt in 2010 STATE Capacity Furnaces MA PA North STATE Capacity Furnaces MG ES MS South TiO 2 Slag Producers QIT Canada [±0.3 mtpy] Exxaro Sands South Africa [±0.7 mtpy] TiZir Titanium & Iron AS Norway [±0.1 mtpy] Multiple producers mtpy Vizag Steel NINL/MMTC private sector mini-bfs 20

21 Global Merchant Pig Iron Trade million tonnes (est) 21

22 Merchant Pig Iron Market Two groups of consumers: EAF steel mills (60-70%) Iron foundries (30-40%). Iron Foundries: Large variety of PI grades for foundry. Higher quality requirements. Dedicated producers in RSA, Canada, Norway, Germany, partly in Brazil and in Russia MPI production Cost pressure and market conditions: Significant number of charcoal fired BFs in Brazil remain idle, Some Russian MPI BFs are out of operation. Russian Tulachermet, the biggest MPI plant, announced an intention to move into 1.5 mtpy steel production and to reduce MPI sales. Ural Steel of Russian Metalloinvest Group is planning to increase MPI sales up to 2 mtpy. 22

23 Global Scrap Trade million tonnes (estimate) Source: ISSB 23

24 Scrap Market - Issues Limited availability of prime scrap Obsolete scrap recent increases in recovery rates in EU and USA Will it recover to previous levels Monitoring and control of scrap exports from Europe EU Steel Action Plan Climate change policies and ambitious carbon emission reduction targets will stimulate domestic scrap use Carbon emission trading scheme in China. Testing phase in several provinces from 2013 Nationally from 2015 This will stimulate further development of energy saving technologies Obsolete scrap usage forecasts in China increase What will be available for export? Export of scrap = export of energy 24

25 Benefits to Steelmakers in Using DRI /HBI or Pig Iron 25

26 Advantages of DRI/HBI Low levels of tramp elements Lower levels of non-metallic substances Uniform density and shape Ease of use in the EAF Hot charging will reduce energy consumption Availability More environmentally friendly Lower capital costs 26

27 Disadvantages of DRI/HBI DRI is highly reactive with moisture DRI has high levels of siliceous gangue 27

28 Value in Use 28

29 Historical Perspective Steelmakers use OBM s, as part of the metallics charge to electric arc furnaces (EAF) OBM s contain little or no residual elements i.e. Cu, Cr, Ti, V, Mo, Sn etc. Many steelmakers have calculated a yielded cost of Fe units as a means to determine the value-in-use OBM suppliers have long held the position that OBM s have an intrinsic value but have struggled to quantify it. 29

30 HBI often sells for less than prime scrap Pig iron usually manages to stay close to the price of prime scrap 30

31 HBI Price Development $450 HBI price development $400 $350 $300 $250 $200 $150 $100 $50 HBI FOB Palua $/tonne [SBB] HBI CFR Italy $/tonne [Metal Expert] HBI CFR USA $/tonne [Metal Expert] HBI FOB Black Sea $/tonne [CIS RM] $0 HBI CFR Far East [Metal Expert] 3A Scrap FOB Black Sea $/tonne [Metal Expert] Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 31

32 CIS Merchant Pig Iron Price Development $450 CIS MPI price development $400 $350 $300 $250 $200 $150 $100 $50 $- Pig iron / Black sea export FOB Black/Baltic Sea port $/t [SBB] Russian MPI $/t FOB Black Sea [Metal Expert] Ukrainian MPI $/t FOB Black Sea [Metal Expert] Russian 3A Scrap Export $/t FOB Novorossiysk excl. VAT [Metal Expert] Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 32

33 Steel Grade Specifications vs. Metallic Feed Quality Source: Tenova HYL 33

34 34

35 Value in Use Study The study showed when comparing similar scrap types that differ in characteristics only with respect to residual content, the inherent cost of a point (0.01 weight %) of copper in the scrap has been determined to be approximately $2.00. The study also considered the replacement of a higher quality grade of scrap with a blend of OBM s and a lower grade of scrap, similar make-up to the higher grade of scrap, but with a higher copper content. This analysis has shown that considerable savings can be accrued through this replacement. The range of savings for the HBI case was ($43) to $331/tonne over the 10 year period evaluated. The savings for the pig iron case was ($29) to $439/tonne over the 10 year period. 35

36 The Future 36

37 Tonnes (billions) Crude Steel Production Forecast EAF Steelmaking Other processes WorldSteel.org 37

38 millions tonnes DRI Production Cold DRI HBI Hot DRI est Source: Midrex 38

39 DRI Growth Forecast Crude steel (b.t) EAF BOF/OH DRI/HBI 57 m.t 75 m.t 95 m.t 115 m.t 140 m.t Source: WorldSteel, Midrex 5% per year growth in EAF steelmaking 15% addition of DRI to the EAF charge 140 million tonnes DRI required by

40 THANK YOU 40