Iran: DRI Plants prefer Domestic Pellets over low Cost

Iranian gas based DRI plants which use 100% DR grade Iron Pellets as basic raw material for steel making, are highly dependent on domestic Pellets presently.

Supply from outside Pellet suppliers is poor because of unfavorable import conditions in Iran due to various political interruptions.

SteelMint research identified that local Pellets (66% total Fe or more) are being preferred by DRI plants because of lower procurement cost by around USD 50-60/MT in comparison to imports (direct/through traders). In addition, the conversion cost of DRI to Pellets is less owing to abundant supply of natural gas and electricity at cheaper prices.

Cost of making 1 MT of DRI from Domestic Pellets

*Figures are indicative
**includes miscellaneous and operating cost
Source: SteelMint Research

Total cost of making 1 MT DRI in Iran is around USD 237/MT which converts to INR 14,338.5/MT; INR is at 60.5 against 1 USD.

Operational DRI Plants Installed Capacity at 17.6 MnT pa

In Feb, 2014, Bardsir Steel located in Badsir started production from its newly commissioned 1 MnT pa DRI plant.

Capacity in MnT pa
Source: SteelMint Research

Operational Pellet Plants Installed Capacity (in MnT pa)

Source: SteelMint Research

Out of 20.4 MnT Pellets being produced, about 92% of the material is used for captive consumption; the rest is for domestic sale. Whereas, DRI is being used for export purposes too.