sponge iron industry –past-present-future - SIMA

SPONGE IRON INDUSTRY – INDIAN OUTLOOK
Sponge Iron or Direct-reduced Iron, is considered to
be an additional support to the ever increasing steel
demand in the developing economies. With
conventional steel making plants requiring high capital
investments and an added pressure of increasing
coking coal prices, the alternate method of
manufacturing Iron from direct reduction provides a
solution in the labor intensive economies like India.
Also, India is the largest producer of sponge Iron in
the world producing over 20 million tons per year, in
last three years. Other than India; Iran, Venezuela,
Saudi Arabia and Mexico are the major sponge Iron
producers. In comparison to this, world’s largest steel
producer and consumer, China has a very small DRI
industry, mainly owing to the fact that, the major
Chinese Steel manufacturers are state owned.
Sponge Iron is produced by directly reducing Iron Ore,
using chemical compound known as Reducing gas,
consisting mainly Carbon Monoxide (CO) and
Hydrogen gas (H ). This reducing agent is primarily
2
produced by either Gas or Coal fired plants. India as
stated above, being the largest producer of DRI, relies
heavily on Coal fired DRI plants. In FY 2008-09, out
of India’s total sponge Iron output of about 21 million
OreTeam Research (www.oreteam.com)
Looking at the figures for last five years, the sponge
Iron production in the FY 2004-05 was approximately
10 million tons, amounting to 18 percent of the global
sponge Iron production. The value rose to little more
than 21 million tons in FY 2008-09, depicting the 31
percent of the total global production. Industry has
achieved the production of 23 million tons for FY
2009-10, thus depicting 35 percent of total DRI
production in the world. Some reports also suggested
that in coming few years, India’s sponge Iron
production will go beyond 40 million tons a year,
keeping in sync with the local and global steel pricing
provided policy initiative supports from the
Government on sustained availability and affordable
prices of vital inputs. The figure below depicts the
increase in the production of DRI in last 10 years.
tons, Coal fired plants contributed about 16 million
tons, amounting to 76 percent of the total Indian DRI
production. The estimated figures depicts that in the
current fiscal year the DRI produced through Coal
fired plants will reach about 17 million tons, about 74
percent of the total Indian sponge Iron production.
JANUARY-2011/39