DRI Output Rises to 2.5m Tons

EghtesadOnline: A total of 2.54 million tons of direct reduced iron were produced in Iran during the first month of the current fiscal year (March 20-April 19), 3% more compared with last year’s similar month.

News ID: ۷۵۰۰۹۱

20 May 2020

Latest data released by the Iranian Mines and Mining Industries Development and Renovation Organization show Mobarakeh Steel Company accounted for the largest share of the output with 711,500 tons to register a 2% year-on-year rise.

Mobarakeh was followed by KSC with 345,884 tons (down 7% YOY), Golgohar with 235,220 tons, Hormozgan Steel Company with 154,165 tons (up 15% YOY), Chadormalu Steel Company with 138,219 tons, Saba Steel Complex with 129,460 tons (up 11% YOY), South Kaveh Steel Company with 124,245 tons (up 18% YOY), Saba Steel with 77,244 tons, Mianeh Steel Complex with 72,137 tons (up 157% YOY), Arfa Steel Company with 72,124 tons (down 4% YOY), Sefiddasht Steel Company with 70,025 tons (up 8% YOY) and Neyriz Steel Complex with 68,606 tons (up 14% YOY).

Other major DRI producers included Sabzevar Steel Company with 65,346 tons (up 4% YOY), Shadegan Steel Complex with 65,130 tons (up 85% YOY), Ghadir Iron and Steel Company with 64,232 tons (down 12% YOY), Baft Steel Company with 62,360 tons, Middle East Mines and Mining Industries Development Holding Company with 61,002 tons (down 19% YOY), and Khorasan Steel Company with 23,777 tons (down 81% YOY).

Iran is the world's second biggest producer of DRI after India.

According to World Steel Association's latest report, 7.34 million tons of DRI were produced in Iran during the first three months of 2020 to register a 12% year-on-year growth.

Iran’s March DRI output grew 18.3% YOY to hit 2.5 million tons.

The country produced a total of 27.73 million tons of DRI in 2019, up 7.7% YOY.

India, Iran's primary rival in DRI output, increased its three-month production by 10.7% YOY to 9.72 million tons.

11m Tons /Year in Production Capacity to Be Added by March 2024

An IMIDRO report on under-construction direct-reduced iron production units shows a total of 11 million tons is expected to be added to Iran’s direct-reduced iron production capacity by the time all these units become operational in the fiscal 2023-24.

Located in Qaen County, South Khorasan Province, Ghaenat Steel Company will have 800,000 tons per year of production capacity upon completion. It is expected to become operational by the end of the current fiscal year (March 2021).

Iran Ghaltak Company's production capacity will hit 70,000 tons per year upon completion. Located in Isfahan province, the project is also expected to be launched by the fiscal yearend.

Bafgh Iron & Steel Company, located in Yazd Province, is slated to become operational in the fiscal 2021-22. It will have the capacity to produce 800,000 tons of DRI per year upon completion.

Kavand Nahan Zamin, located in Kerman Province, will have a production capacity of 0.5 million tons per year by the end of the next fiscal year.

Also coming on stream in the fiscal 2021-22, Behnavard Steel Complex in Yazd will have a production capacity of 500,000 million tons per year upon completion.

The development of Butia Iranian Steel Company in Kerman will add 1.8 million tons to the capacity of Iran's DRI production. It is expected to be inaugurated in the fiscal 2022-23.

In the same year, Bisotoun Steel located in Harsin, the capital of Harsin County, Kermanshah Province, is also expected to be completed. The production capacity of this unit will reach 150,000 tons per year.

The first phase of Makran DRI Plant in Chabahar, capital of Chabahar County, Sistan-Baluchestan Province, is due to be completed in the fiscal 2023-24 similar to Torbat Steel Complex in the capital of Torbat-e Heydarieh County, Khorasan Razavi Province. The former will add 1.6 million tons per year to the capacity of Iran's DRI production and the latter's capacity will hit 1.8 million tons per year upon completion.

PERED Engineer

Iran is the engineer of the so-called direct-reduction technology called PERED, or Persian Reduction, invented and patented by Mines and Metals Engineering GmbH, an Iranian engineering company registered in Germany.

PERED technology, which makes optimum use of energy and raw materials, reduces production costs with the added advantage of being more environment-friendly compared to other direct reduction methods.

There are generally three methods for DRI production: HYL process, presently marketed under ‘Energiron’ trademark, jointly developed by Tenova and Danieli; MIDREX Process patented by Midrex Technologies Inc. along with its parent company Kobe Steel Ltd; in addition to PERED.

The replacement of MIDREX and Energiron with PERED cuts the production costs by cutting on the required initial investment and operational costs. Moreover, it is more eco-friendly.

Speaking to Financial Tribune in an exclusive interview, the engineering manager of MME, Hossein Aziztaemeh, said most DRI plants in Iran utilize the MIDREX reduction technology.

In PERED, the reduction process is known to be more efficient, employs improved cooling methods and cuts pollutant gas emissions. With less heat, more homogeneous reducing gas, more controllable pellet feed and use of centrifugal compressors, PERED requires less water, electricity and gas to operate, alongside less operational and maintenance costs.

According to MME’s website, PERED can also produce cold and hot DRI, hot briquetted iron and combinations of all three.

Aziztaemeh said PERED has been used in three DRI plants in Iran, namely Shadegan in Khuzestan Province, Miyaneh in East Azarbaijan Province and Neyriz Steel Company in Fars Province.

DRI, also known as sponge iron, is produced from direct reduction of iron ore in the form of lumps, pellets or fines by a reducing gas. It can be processed to create wrought iron.

Crude steel is dominantly produced using two methods: making cast iron in blast furnaces or using DRI and scrap in electric arc furnaces.

More than 70% of the world’s steel are made using blast furnaces, while Iranian steelmaking is mostly dominated by EAFs.

The selection of each production method depends on various parameters, namely raw materials and energy costs.

Blast furnaces require large quantities of coking coal, a product hardly available in Iran and costly to import. This is while the country enjoys huge gas and iron ore reserves, making EAFs the much more desirable route to take. The shortage of scraps has consequently driven steelmakers to use DRI.

With such a sizable production, cutting costs would give a considerable boost to the industry. And PERED is designed to do just that.