FOCUS: Global HBI market to continue to grow, IIMA says

The global hot-briquetted iron (HBI) export market will continue growing on increased demand and higher output levels, according to Chris Barrington, secretary general of the International Iron Metallics Association (IIMA).

“There is increasing production of flat products via the [electric-arc furnace] (EAF) route and, to achieve the required quality, steelmakers can’t rely totally on scrap, so that [could] lead to higher demand for ore-based metallics such as HBI,” Barrington said on the sidelines of the Metal Bulletin’s sixth World DRI & Pellet Congress, held in Dubai on April 25-26.

HBI is the compacted form of direct-reduction iron (DRI) and was developed to reduce the risks associated with shipping and handling because it is far less reactive than DRI.

In 2017, global exports of HBI, excluding in-house shipments, exceeded 6 million tonnes, according to Metal Bulletin estimates based on IIMA data. In 2016, the figure was around 4 million tonnes.

The export market is expected to grow by at least another 1 million tonnes in 2018.

In 2017, Russia was the largest global HBI supplier, exporting some 2.8 million tonnes - all supplied by Metalloinvest, according to IIMA data - and accounting for more than 40% of the global HBI market.

Metalloinvest sold a total of 3.6 million tonnes of HBI in 2017, the company said in a operational report.

The company increased HBI production to 4.50 million tonnes per year after starting up its 1.80 million-tpy HBI-3 Plant at the Lebedinsky GOK (LGOK) facility at Gubkin, in the Belgorod region of Russia, in July 2017. The company has room to increase shipments by around a further 900,000 tonnes this year, it said. 

Venezuela was the second largest HBI supplier in the world, despite continuing disruptions to raw materials supplies, the country’s economic crisis and insufficient operating funds and problems with energy supplies. In 2017, Venezuela exported 1.05 million tonnes of HBI.

Metal Bulletin's latest price assessment for HBI exports from Venezuela has been on a slow upward trend since the last quarter of 2015 and was $250-260 per tonne fob main port on April 23.

The third largest supplier of HBI in 2017 was the United States. Last year Austria's Voestalpine exported around 1 million tonnes from its 2 million-tpy US HBI plant in Texas, including in-house shipment to its Austrian plants in Linz and Donawitz, and to Mexico, according to IIMA data.

Iran is a growing source of iron ore pellets and is expected to increase exports of DRI/HBI this year. In 2017, the country exported around 600,000 tonnes of DRI/HBI and shipments are forecast to reach about 1 million tonnes in 2018-2019 according to Iranian sources.

India, Malaysia and Libya and were other sponge iron and HBI exporters and shipped a combined total of around 1.8 million tonnes in 2017.

In terms of demand in 2017, the US was the largest DRI/HBI consumer, importing around 1.8 million tonnes, according to the International Steel Statistics Bureau (ISSB). Almost all volumes were shipped from US steelmaker Nucor’s Nu-Iron facility in Trinidad & Tobago in the Caribbean.

The second largest consumer was Italy, which imported 1.12 million tonnes of HBI last year, according to ISSB.

Mexico, Spain, Austria and South Korea were also significant HBI consumers.

IIMA expects demand for DRI/HBI to increase in India and Iran.

“In India, the national steel plan envisages demand of 80 million tonnes of DRI and sponge iron, based on an annual crude steel output of 300 million tonnes,” Barrington told Metal Bulletin.

“[And Iran's] 'Vision 2025' plan for 55 million tonnes crude steel production capacity, is based on an increase in DRI production,” he said, adding that an extra 1.6-2.0 million tonnes of DRI production was expected in 2018.

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