The direct reduced iron-electric smelting furnace-basic oxygen furnace (DRI-ESF-BOF) route could reach near cost parity with traditional DRI-EAF over the long term. In some cases, it could even be cheaper, depending on regional dynamics and whether the fuel feedstock used is natural gas or hydrogen, says Wood Mackenzie.
The ESF-BOF process could bridge the gap between existing EAF and BF-BOF technologies. The initial ESF process utilises electricity, instead of coal/coke, as fuel like an EAF, but unlike the EAF process it can accept DRI produced with low and medium-grade iron ores as a feedstock. ESF-produced liquid hot metal can then be processed into steel in a traditional basic oxygen furnace, the consultancy notes.
ESF-BOF can potentially be rolled out at BF-BOF facilities using existing BOF footprints, helping to reduce blast furnace use and cut emissions while reducing capital expenditure, operational complexity, and project execution time, it adds.
“ESF technology offers steelmakers greater flexibility. They can either use their own DRI or trade all ranges of DRI products based on their value-in-use (VIU) analysis; in contrast DRI-EAF producers are technically limited to high-grade iron ore products,” Daniel Carvalho, Wood Mackenzie global research director, metals and mining processing, says in a note seen by Kallanish.
DRI stands out as a preferred route to low-emission steelmaking. “Using green hydrogen instead of natural gas or coal to produce DRI as the metallic feedstock eliminates the sources of carbon from the steelmaking process and is the route closest to carbon neutrality. As a result, DRI’s share in the metallic mix is projected to more than double by 2050,” Carvalho continues.
The consultancy foresees seven potential hubs for DRI-based steel production by 2050. Each will have a distinct technological mix and development timeline.
The Middle East, China, Australia and Europe are likely to lead DRI capacity additions. The US and Brazil will see some traction, but high scrap use may dampen DRI demand. India is expected to shift from coal to gas-based DRI only gradually, limiting its potential contribution to green steel production.
Adam Smith Poland
