A total of 12.07 million tons of DRI, also known as sponge iron, were produced in the country during January-May to register a 3.47% growth compared with the corresponding period of 2019, the latest report released by World Steel Association shows.
The country is now the biggest DRI producer in the world, overtaking its primary rival, India, which produced a total of 11.01 million tons (down 27.1% year-on-year) during the period under review, according to the Brussels-based international trade body for the iron and steel industry.
The world’s total DRI output in the first five months of 2020 stood at 32.1 million tons to witness a 16.6% decline YOY.
Other major DRI producers in the world were Egypt with 2,224 tons (down 15.4% YOY), Mexico with 2,054 tons (down 23% YOY), Saudi Arabia with 1,767 tons (down 1.6 YOY), the UAE with 1,311 tons (11.6% YOY), Canada with 488 tons (down 32.5% YOY), Qatar with 441 tons (down 48.5% YOY), Libya with 321 tons (down 6.8% YOY), Argentina with 237 tons (down 60.5% YOY), Venezuela with 140 tons (down 37.1% YOY) and South Africa with 36 tons (down 90.7% YOY).
Mobarakeh Steel Company, located in Isfahan Province, is Iran's biggest producer of sponge iron. MSC is the biggest steel producer in Iran and the wider Middle East and North Africa region.
Accounting for Half of Global Output in May
Iran was also the world’s biggest DRI producer in May. The country’s output grew 7.61% year-on-year to hit 2.7 million tons last month.
In fact, the output accounted for about half of the global production (5.62 million tons) during the month under review.
India stood next with 1.5 million tons, followed by Egypt with 462 tons, Mexico with 390 tons, Saudi Arabia with 342 tons, the UAE with 151 tons, Libya with 48 tons, Qatar with 14 tons and Venezuela with 10 tons.
Canada, South Africa and Argentina registered zero DRI production in May.
Iran has been working to increase its iron ore processing capacity, including both DRI and hot-briquetted iron production to feed its steelmaking expansion target.
The country was the second biggest producer in the world with 27.73 million tons of DRI production in 2019, registering a 7.7% year-on-year growth.
India increased its production last year by 7.7% YOY to 36.85 million tons.
Expansion Plans
The Iranian Mines and Mining Industries Development and Renovation Organization expects DRI production capacity to reach 37.2 million tons by the end of the current fiscal year (March 2021), while actual production is estimated to reach 33.6 million tons to utilize 90% of its nameplate capacity.
An IMIDRO report on development of under-construction DRI production units shows 11 million tons are expected to be added to Iran’s production capacity by the time the construction of all these units is complete 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 this 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 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 0.5 million tons per year in production capacity by the end of the fiscal 2021-22.
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 Company 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 Mokran 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 Torbat-e Heydarieh County of 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.
Persian Reduction Technology
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.
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.
January-May Steel Output at 11.44m Tons
The Worldsteel;s January-May report also shows Iranian steel mills produced 11.44 million tons of crude steel during the five months under review, which indicate an 11.1% rise compared with the corresponding period of 2019.
The country's May output hit 2.35 million tons to witness a year-on-year growth of 8.9%, according to the Brussels-based international trade body for the iron and steel industry.
Iran’s world ranking remains unchanged compared to Worldsteel's previous monthly report: 10th biggest crude steel producer.
The country is placed between Brazil (ninth) with 12.14 million tons of production and Vietnam (11th) with 9.02 million tons, the new report shows.
The world’s 64 steelmakers produced 768.68 million tons of steel over the five-month period, down 5.2% YOY.
Global steel output stood at 147.775 million tons in May, indicating an 8.7% decrease YOY.
China was the world’s largest crude steel producer with 411.75 million tons of steel output in the five-month span, up 1.9% YOY.
The giant steel producer was followed by Japan with 36.6 million tons, India with 35.85 million tons, the United States with 31.33 million tons, Russia with 29.85 million tons, South Korea with 27.41 million tons, Germany with 15.27 million tons and Turkey with 13.49 tons.
Iran’s crude steel output stood at 31.9 million tons in 2019, according to Worldsteel, up 30.1% YOY.
Crude steel is defined as steel in its first solid (or usable) form: ingots and semi-finished products (billets, blooms and slabs). This is not to be confused with liquid steel, which is steel poured.
Iran aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan, which targets annual production capacity expansion to 55 million tons and 20-25 million tons of exports per year by 2025.
The country’s current steel production capacity stands at 35 million tons per year.