The increasing role of direct reduced iron in global steelmaking

Direct reduced iron (DRI), produced by the reaction between iron ore and reducing gasses, is used as a source of low-residual iron, in addition to ferrous scrap and pip iron, in the production of steel mainly through the electric are furnace (EAF) route of steelmaking. The main DKI technologies in use are those of Midrex and Hyl, but in recent years a myriad of newer processes emerged based on variations in feedstock, reducing agent and fuel sources. Since the beginning of the nineties, DRI has increasingly emerged as a cheaper, low-residual iron feedstock for EAFs, which have traditionally relied almost entirely on ferrous scrap feed. The main stimulus behind the interest in DRI has been the increasing popularity of the EAF and the 'mini-mill' set-up as the favoured steelmaking option compared to the traditional and much less flexible blast furnace/ basic oxygen converter. This, however, has been creating a problem with regard to availability of low-residual scrap, resulting in upward pressure on high quality scrap prices and leaving DRI, traditionally the 'expensive alternative', as a much more competitive consideration. The second main determinant has been the increasing production efficiency of existing steel plants which, in the light of improvements such as continuous casting and near net shape easting, has been constraining the supply of low-residual domestic scrap, traditionally the prime source of EAF feed. The explosion of current and proposed DRI projects has been accentuating the mounting interest of global role-players in assuring the availability of reliable sources of low-residual iron units far the future, especially in cases where definitive competitive advantages exist with regard to proximity to primary sources of iron ore and fuel (gas or coal).