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Sponge Iron Report

Sponge Iron Report



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Published by: api-26041653 on Oct 18, 2008
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Sponge iron is the product created when iron ore is reduced to metallic iron, usually with some kind of carbon(charcoal, etc), at temperatures below the melting point of iron. This results in a spongy mass, sometimes calleda bloom, consisting of a mix of incandescent wrought iron and slag. Sponge Iron is a recognized alternative tosteel scrap as a raw material for the manufacture of various steel products. The twin issues of rapid depletion of Coking Coal reserves and the scarcity of indigenous scrap, made the Government of India support production of sponge iron in the country.“Sponge iron is a metallic product produced through direct reduction of iron and iron ore pellets in the solidstate. It is a substitute for scrap and is mainly used in making steel through the secondary route. The processof sponge iron making aims to remove oxygen from iron ore. When that occurs, the departing oxygen causesmicro pores in the ore body making it porous. The final product, when observed under a microscope,resembles a honeycomb structure looking spongy in texture, hence the name sponge iron. “
Sponge iron is not useful in itself, but must be processed to create wrought iron. The sponge is removed fromthe furnace, called a bloomery, and repeatedly beaten with heavy hammers and folded over to remove the slag,oxidise any carbon or carbide and weld the iron together. This treatment usually creates wrought iron with aboutthree percent slag and a fraction of a percent of other impurities. Further treatment may add controlled amountsof carbon, allowing various kinds of heat treatment (e.g. "steeling").Today, sponge iron is created by reducing iron ore without melting it. This makes for an energy-efficientfeedstock for specialty steel manufacturers which used to rely upon scrap metal.
Global Scenario
The total global production of sponge iron was estimated to be about 49.45 million tons in the year 2004
India, Venezuela, Iran and Mexico are the four largest producers of sponge iron with about 16%, 14%,11% and 11% share of world's total production.
Sponge iron is increasing being used in steel making because of lower availability of scrap in theinternational market and increased use of Electric Arc Furnace in steel making.
Indian Scenario
With the domestic steel industry picking up during the past year and prices moving up in leaps andbounds, India has emerged as the world's largest producer of sponge iron (or direct reduced iron),accounting for around 16 per cent of the global output. T
he domestic average growth rate clocking 21 percent as against the average global growth rate of 10 per cent
India is the global leader with a production of 8.07 million tons (Year 2004), followed by Venezuelawith 6.9 million tons.
Sponge iron is used to make steel by all Indian steel producers and is a substitute for steel melting scrap.
Healthy demand growth in steel sector is also pushing sponge iron demand. Apart from decliningavailability of steel melting scrap, sponge iron demand has also gone up considerably and is likely tocontinue.
About 45% of the domestic output is through EAF (Electronic Arc Furnace) route. However, goingforward this is slated to increase. With steel production is likely to grow at 6%-7%, the demand for
sponge iron is likely to grow at more than 10 percent till the year 2007 and then expected to stabilize at8 percent after that.
Factors Influencing Demand & Supply of Steel Long and Steel Flat
The demand for steel is dependent on the overall health of the economy and the infrastructuredevelopmental activities being undertaken.
The steel prices in the Indian market primarily depend on the domestic demand and supply conditions,and international prices.
Government and different producer and consumer associations regularly monitor steel prices.
The duty imposed on import of steel and its fractions also have an impact on steel prices.
The price trend in steel in Indian markets has been a function of world's economic activity.
Prices of input materials for iron and steel such as power tariff, freight rates and coal prices, alsocontribute to the rise in the input costs for steel making.
Domestic industry is showing improved performance on back of higher volume, improved realization,increased operating efficiency and financial restructuring.
Sponge Iron Production Figures. (in lakh tones)Year Production Gas Based Growth % Production Coal Based Growth % Production Total Growth %
1990-91 NA NA NA NA 8.6 NA1991-92 NA NA NA NA 13.00 51.21992-93 8.97 NA 4.69 NA 13.66 5.081993-94 15.23 69.8 8.09 72.5 23.32 70.071994-95 21.89 43.7 12.21 50.9 34.1 46.21995-96 29.58 35.1 12.84 5.1 42.42 24.41996-97 33.34 12.7 16.87 31.4 50.21 18.31997-98 36.42 9.2 17.36 2.9 53.78 7.11997-98 36.42 9.2 17.36 2.9 53.78 7.11998-99 34.48 -5.3 17.80 2.5 52.28 -2.81999-00 34.62 0.4 18.78 5.5 53.40 2.12000-01 34.62 0 20.19 7.5 54.81 2.62001-02NA NA NA NA56.58 3.22
Sector-wise Demand of Scrap and DRI/HBI (in lakh tons)
SectorMelting ScrapDRI/HBI
2001-02EAF (Electric Arc furnace)31 43IF (Induction Furnace) 55 172006-07 EAF 45 60IF 73 352011-12 EAF 64 82IF 76 56*HBI = Hot Briquetted Iron
2002-03NA NA NA NA69.09 22.112003-04 (p)NA NA NA NA80.85 17.02
Direct Reduction is an iron making process for the new era, which utilizes natural gas to reduce iron ore toproduce Direct Reduced Iron (DRI). As Direct Reduction Plants are not built on the same, enormous scale asBlast Furnaces, their investment costs are lower, and they have been mainly constructed in developing countrieswhere natural gas is relatively inexpensive. Recently, however, even in developed countries, such as the UnitedStates, Direct Reduction Plants are drawing more and more attention as a way to provide a stable supply sourceof pure iron, substituting steel scrapOf several Direct Reduction processes producting DRI, the MIDREX® DR Process, which was developed andis owned by Midrex Technologies,Inc., a wholly-owned subsidiary of Kobe Steel, accounts for about 60% of world wide prodution.The reduction of Iron Ore can be achieved by using either carbon bearing material, such as non-coking coal or asuitable reducing gas in the form of reformed natural gas. The processes employing coal are known as solid-reluctant of coal-based processes while those employing reducing gases are known as gas-based processes.Sponge Iron produced by gas-based process is normally hot briquette and hence it is also known as BriquettedIron (HBI).

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