Strategies to use Direct Reduced Iron in the Integrated Steel Value Chain

Abstract

Hatch assessed the merits of producing direct reduced iron (DRI) in an integrated steel plant using available process gases supplemented by natural gas (NG), and evaluated strategies to consume the resulting DRI.

Technical limits to consume DRI within the steel plant are identified and strategies to allow greater DRI consumption discussed. Three (3) case studies were developed and all had positive pretax rates of return ranging from 23-26% driven by reduced scrap purchases and additional steel and DRI sales. The benefit of redirecting steel plant process gases to DRI production was not apparent due to a substantial increase in purchased power required to produce steel. DRI added to the blast furnace increased operating costs but this was offset by increased steel sales and related profits. The use of a 1.5 Mt/a DRI plant provided economies of scale and generated DRI sales, ideally to other steel plants within the same organization. The best strategy is to build the DRI plant where it provides the lowest operating cost and best logistics in the value chain from iron ore mining to pouring liquid steel. The advantages of using DRI as either a scrap substitute or to increase steel production have similar financial returns and need to be assessed on a case-by-case basis. DRI sales are a necessary part of the business case.