World DRI Production by Year (Mt) Source: Midrex Technologies, Inc
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2018 WORLD DIRECT REDUCTION STATISTICS www.midrex.com CONTENTS 2 World DRI Production 7 World DRI Production by Region/Year 8 World DRI Production Tables 10 Major Trade Routes for International Trade of DRI 11 World DRI Shipments 12 World Direct Reduction Plants Audited by 8.5.2019 2 TABLE OF CONTENTS < > The top five DRI-producing countries last year: New Capacity, Plant 2018 Top 5 DRI Producing Nations Ramp-Ups Boost World COUNTRY PRODUCTION (Million Tons) India 28.11 DRI Production Over Iran 25.75 100M Tons in 2018 Russia 7.90 Saudi Arabia 6.00 Mexico 5.97 nnual global DRI production reached the lofty milestone of 100 million tons in 2018, riding Source: World Steel Association, SIMA, and Midrex Technologies, Inc. Athe crest of double-digit growth for the second consecutive year. DRI output was up 15% over 2017 Over 11 million tons of last year’s production was hot performance. From 2016 to 2018, world DRI production has DRI (HDRI), which is fed directly to the EAF to reduce increased by 38%, which is the largest increase in any two- energy consumption and increase melt shop productivity. year period since 1985. The sustained growth through 2018 Hot briquetted iron (HBI), which is compacted DRI, account- was driven primarily by strong demand for natural gas-based ed for 9 million tons of the 2018 total. DRI – an environmentally friendly and low residual metallic Midrex production grew to nearly 64 million tons, which that is needed to produce today’s premium steel products. was a 13% increase over 2017. Combined, India and Iran were responsible for more than half of total world DRI production in 2018. 2018 World DRI Production by Process Other Rotary Kiln, 0.7% 20.2% HYL/Energiron 15.5% Total World Production: 100.5 Mt 2016 2017 2018 MIDREX® 64.8% 64.8% 63.5% HYL/Energiron 17.4% 16.9% 15.5% MIDREX® 63.5% Other 0.3% 0.7% 0.7% Rotary Kiln 17.5% 17.6% 20.2% Source: Midrex Technologies, Inc. 2018 World Direct Reduction Statistics Page 2 © 2019 Midrex Technologies, Inc. 8.5.2019 3 TABLE OF CONTENTS < > BEHIND THE NUMBERS production would be much greater but for the low availability Three factors contributed to 2018 production increases: the and high cost of natural gas. Production of natural gas-based commissioning of new capacity, especially in Iran, the return DRI was 8.14 million tons, an increase of 8% over 2017. to operation of many coal-based rotary kiln furnaces in India, Russia again was the third largest producer of DRI and and the further ramp-up of recently commissioned plants. HBI, accounting for 7.9 million tons, a 13% increase over 2017. Iran produced over 25.7 million tons of DRI, all using This primarily was due to the continued ramp-up of capacity natural gas, which easily made Iran the number one gas- by the newest MIDREX Plant (HBI-3) at Metalloinvest’s based producer in 2018. By the end of the year, there were Lebedinsky GOK in Gubkin, Belgorod region. The HBI-3 Plant 33 direct reduction modules operating in Iran and at least has a design capacity of 1.8 million t/y, which gives Metallo- a dozen more were in various phases of construction. DRI invest an installed annual production capability of 4.5 million capacity growth has been phenomenal – three-and-one-half tons and reinforces its leading position in the global merchant times more capacity now than one decade earlier – especially HBI market. considering the international sanctions placed on the country. Saudi Arabia vaulted into fourth place among DRI produc- DRI production in India surged to over 28 million tons ers, making 6.00 million tons in 2018, to surpass Mexico, in 2018, placing it firmly in the lead of all DRI-producing which declined slightly to 5.97 million tons. nations. It is estimated that approximately 30% of all DRI Egypt joined the nations producing more than 5 million and HBI produced last year within India was transported to a tons, which is nearly double its output of 10 years earlier. steelmaking facility off-site. A very large share of this was via UAE DRI production continued to increase, as it made 3.78 truck transport to nearby melt shops. million tons only 8 years after entering the industry. Most of the output – nearly 20 million tons – was by Venezuelan production fell to less than 1 million tons, rotary kiln plants which use coal as the fuel and the reductant. which is a little more than 10% of its peak output in 2005 and According to the Sponge Iron Manufacturers Association the lowest performance in 40 years. (SIMA), headquartered in Delhi, there are 315 of these units There has been notable growth within the USA, due to in operation. The yearly production by these rotary kilns was the combination of an intense demand for low residual iron 35% higher than in 2017. units and the availability of low-cost natural gas. After the Another contributor to increased DRI output within industry was completely shuttered from 2009-2013, the USA India was the stabilization of the COREX® export gas-based produced 3.35 million tons in 2018, with the expectation of and coke oven gas-based plants. The MIDREX® Plants at significantly greater figures in the coming years. JSW Steel (Toranagallu) and JSW (Dolvi) set production and Algeria joined the ranks of DRI-producers in 2018, with performance records during the year while operating with the start-up of a 2.5 million t/y MIDREX Combination HDRI/ COREX export gas and coke oven gas, respectively. Indian CDRI Plant for Tosyali Algerie, located near Oran, Algeria. JSW Steel Toranagallu in Karnataka, India LGOK HBI-2 and HBI-3 in Gubkin, Russia 2018 World Direct Reduction Statistics Page 3 © 2019 Midrex Technologies, Inc. 8.5.2019 4 TABLE OF CONTENTS < > NEW CAPACITY AND PLANTS UNDER CONSTRUCTION MIDREX® UNDER CONSTRUCTION NEW CAPACITY AQS to Add 2.5 Million Tons of DRI in Algeria World’s Largest Single Module HDRI/CDRI Plant Begins Operations at Tosyali Algerie Tosyali Algerie started up and commissioned a 2.5 million tons per year (t/y) DRI plant equipped with a MIDREX MEGA- MOD® furnace, which is capable of simultaneous production of hot and cold DRI (HDRI and CDRI, respectively) to match the requirements of the steel mill. HDRI from the MIDREX Plant is expected to help substantially increase billet production and Construction of a 2.5 million t/y MIDREX Combination DRI boost high-quality rebar production to more than 3 million t/y. Plant for Algerian Qatari Steel (AQS) continued throughout Tosyali Algerie started production of steel rebar in Bethioua, 2018. The plant, located in Bellara, Algeria, 375 km east of near Oran, Algeria, in 2013, by using scrap as feedstock. It sub- Algiers, will provide HDRI and CDRI to a nearby EAF melt shop, sequently added 500,000 t/y of wire rod production capac- which will produce 2.0 million t/y of rebar and wire rod. The ity, which was started up in 2015. At this point, the decision MIDREX Plant will be capable of producing HDRI and CDRI si- was made to add a direct reduction plant, supplied by Midrex multaneously without halting operation. Technologies, Inc. and its consortium partner, Paul Wurth. AQS was founded in 2013 as a joint venture between Qatar Commissioning of the world’s largest single module DRI plant Steel International (49%), Algerian investment group, SIDER was completed in July 2018 and production of CDRI began in (46%), and the National Investment Fund of Algeria (5%). The late November 2018. HDRI production, commenced in February AQS DRI Plant is scheduled for start-up in late 2019. 2019. Iron ore pellets for use in the DRI plant are transported from the port at Arzew via a 10-km conveyor. An insulated mechani- cal conveyor is used to transport HDRI, typically at 600° C, from the MIDREX® Shaft Furnace to the nearby melt-shop, thus im- proving energy efficiency. 2018 World Direct Reduction Statistics Page 4 © 2019 Midrex Technologies, Inc. 8.5.2019 5 TABLE OF CONTENTS < > NEW CAPACITY AND PLANTS UNDER CONSTRUCTION Cliffs Moves Toward Completion of Great Lakes HBI Plant HYL/ENERGIRON NEW CAPACITY No new HYL/Energiron modules began operation in 2018. UNDER CONSTRUCTION Tenova HYL/Energiron DRI Micro-Module Selected for Project in Bolivia HYL/Energiron direct reduction technology will be used for the first stage of an iron & steel project for Empresa Siderúrgica del Mutún (ESM) at Puerto Suárez, Santa Cruz, Bolivia. The 250,000 t/y Micro-Module DRI Plant is expected to be operational in mid-2021. Construction of a 1.6 million t/y MIDREX HBI Plant for Cleveland-Cliffs, Inc. continued in 2018. Cleveland-Cliffs announced plans to build the plant on a brownfield site at the Port of Toledo in June of 2017. The Toledo location was chosen due to its proximity to several future customers, as well as its logistics advantages including affordable gas availability and access by multiple rail carriers. Groundbreaking for the plant was in April of 2018. It will provide a domestic source of HBI for electric arc furnace steel- makers in the Great Lakes region when it begins operation in summer 2020. 2018 World Direct Reduction Statistics Page 5 © 2019 Midrex Technologies, Inc. 8.5.2019 6 TABLE OF CONTENTS < > 2018 World Shaft Furnace Production by Process MIDREX® Total World Production: 100.5 Mt 80% 2016 2017 2018 MIDREX® 78.8% 79.0% 79.9% Other Shaft Furnace 21.2% 21.0% 20.1% Other Shaft Furnace Source: Midrex Technologies, Inc.