Iran needs more investment to increase production capacity for direct reduced iron and most of the new investment in the industry should be directed to DRI expansion, according to Rasoul Khalifesoltani, secretary of the Iranian Steel Producers Association, speaking at a conference in Tehran on Sunday.
"Although we do not agree with export of sponge iron [DRI], I believe that DRI export is quite attractive for Iranian producers," he said.
"Turkey, the neighboring country, is a huge importer of ferrous scrap and it could replace a portion of its scrap imports with sponge iron, if we develop our production enough," he said. "There is demand for at least 10 million mt/year of sponge iron in Turkey," he estimated.
"On the other hand, shortage of sponge iron is a challenge for Iranian expansion projects and more DRI modules should be installed in Iran," he said.
Khalifesoltani noted that the Iranian steel development expansion to 55 million mt/year capacity by 2025 is being realized but new investment for production of 11 million mt/year of iron ore concentrate, 6 million mt/year of iron ore pellet and 12.5 million mt/year of DRI is still needed.
He also predicted that Iran's capacity to export steel will be increased to some 20 million mt/year proportional to the increase in output up to 2025, which will comprise about 11 million mt/year of flat products, 6.5 million mt/year of longs and about 2.5 million/year of semi-finished products.
As a result of cheap natural gas, Iran is one of the world's biggest producer of DRI. The country produced some 16.01 million mt of DRI in 2016, up 10.1% year on year.
Some 85% of Iran's steel industry is based on direct reduction technology for steelmaking using natural gas instead of coal.
Iranian mines and metal state holding Imidro, in February said it is negotiating with Japan's Kobe Steel to use its technology at reducing water and energy consumption by Iranian DRI modules.
