The poly-metallic Clear Hills deposit and the HI Process being developed for upgrading the ore into merchantable products is a huge market differentiator for Ironstone Resources. Unlike the iron ore concentrate produced from the Labrador Trough in eastern Canada, Ironstone will be producing a highly metallized iron unit in hot briquette form (HBI) using common direct reduction technology with a proprietary reactor added to purify and enhance the iron for recovery.

Ironstone’s iron product is extremely versatile, can be sold to virtually all steel makers and scrap producers, and commands high margins. The following is an overview of the metallics market and its projected growth in the next decade.

Global DRI Metallics Industry

With direct reduced iron (DRI) production on the rise and growth of the electric arc furnace (EAF) steel industry, favorable factors show the outlook for world DRI also to be quite positive. The world of iron metallics is growing and the steel industry is looking to use it to its full potential in the upcoming years.

Approximately 70.5 million metric tons of DRI was produced globally in 2010, and despite harsh economic conditions that crippled most financial sectors, world DRI production remained fairly healthy especially relative to other parts of the steel industry. Despite these economic challenges, the world of direct reduction is still growing. Favorable factors show the outlook for world DRI also to be on the rise for the next decade. Focus of new plants will be on flexibility, efficiency, coal gasification, hot transport of DRI and greater efforts to reduce CO2 emissions.

In the natural gas fueled DRI sector, over 52 million tons were produced in 2010. The coal-based rotary kiln DRI sector operated between 350 and 400 units, almost all of them in India, and with a few in South Africa and in Peru. Their production is estimated to have been about 18.1 million tons.

The increasing global nature of the steel industry ensures a fiercely competitive environment. The integrated and electric arc steelmakers are experiencing increasing economic and environmental pressures to make incremental improvements in operating costs, product quality, environmental performance, and the need to demonstrate higher rates of return.

Many EAF based mini-mill producers are entering the high quality value-added market, particularly the flat rolled products sector. This requires a supply of consistent high-quality low-residual iron units, ideally at a stable price. The price volatility and variable quality of raw materials are of constant concern to the mini-mills. There is also a growing realization that a high quality hot metal feed can significantly improve the productivity and product quality of an EAF.

DRI Metallics Market Forecast

New technology is potentially one of the better ways of dealing with these pressures. Now, more than ever, the industry needs new technology as a means of relieving environmental concerns and lowering the cost base of steel production.

In the United States, the EAF-based mini sheet mills need about 13 million tons per year of high-quality metallics, including the prime grades of scrap. In comparison, only about 16 million tons of prime scrap is being generated annually in the U.S. at the present time for all uses. For this reason, the mini sheet mills, at times, are heavy importers of pig iron and hot briquetted iron.

Since 1989, about 40 thin-slab/hot strip mills have been built globally that rely on the EAF steelmaking (scrap-using) route. These mills may need to purchase about 45 million tonnes of high-quality metallics per year, including prime scrap, with 70% of the metallics supply needs to be high-grade prime scrap or equivalent items, such as HBI.

The global steel and foundry industries needed about 1.7 billion tonnes of metallics (steel scrap, pig iron and steel scrap substitutes) in 2010. The components of the metallics supply may consist of about 1.0 billion tonnes of pig iron, 75 million tonnes of steel scrap substitutes (ie HBI) and 650 million tonnes of steel scrap consumption.

The metallics may be positioned for an even brighter future as the world focuses on greener technologies and reducing carbon emissions. Already seen as a preferred choice for reducing emissions, the further demand and utilization of the DRI product and associated technologies appears to be on the rise for the future. It is expected that there will be a continued rate of 5-7% growth over next decade, which will lead to an estimate of 95 million tons in 2015 and 120 million tons in 2020, up from the 70 million tons annually produced today. 

Note: The above information is being supplied as a guide only and readers must make their own investigations and satisfy themselves as to the accuracy of any forecasts made.