Iran –

World leading DRI production rates

Keyvan Jafari Tehrani

Member of the Board & Head of Int’l Affairs
 Content:
1 Iranian Iron Ore - What quality is available?

2 Pelletizing Bottle Neck – When will this ease?

3 DRI Production – What factors are effected?

4 Global Trade - Could iron ore be exported

internationally?

5 Conclusion
2
 Iranian Iron Ore –
What quality is available?

3
 Iron Ore Reserve
Billion
Tons
5 4.6
4.5
4
3.5 3.1
3
2.5
2 1.7
1.5 1.4

1
0.5
0
Resource Reserve Demand for Residual
2025

Figure 1: Iran’s Iron Ore Reserve 4

Source IROPEX
Iron Ore Quality

5
Figure 2: Iran’s Iron Ore Quality
Iron Ore Mines Location

Figure 3: Iran’s Iron Ore Mines Location 6

 Iron Ore Production
50
46 45
45 44
42.4
40
35.5 35
35 32 33
31
30

25

20
16
15 14
11 10.9
10
5 5
5

0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Iron Ore Production (Government) Iron Ore Production (Private)

Figure 4: Iran’s Iron Ore Production by Sector 7

Source: IROPEX
Pelletizing bottle neck –
When will this ease?

8
 Steel Value Chain Upstream 2015 vs. 2016
45
40
40 38.2
15.2
%
35
28.2
%
30 28.5 9.5
Million Tons

2.4 %
24.74 % 19.2
25 23.3
%

20 18.17 17.89
16.33
14.55 14.9
15 13.2
11.07
10
5.5 4.8
5 2.6 2.3
0.4
0
Iron Ore Concentrate Pellets DRI Billet Steel Products
2015 2016 2017

Figure 5: Steel Value Chain Upstream 2015 vs. 2016 – Jan & Feb 2017 9
Source: IMIDRO, Iran Steel Comprehensive Plan, Foolad Technic Co
 Steel Value Chain Requirements
200
168

150
130

100
82 87 86
70 70
55 57 60
48 44 44
50 38
29 26 28 26
20

0
Crude Steel Pig Iron/ Cast Iron Pellets -5 Concentrate Iron Ore
-9
-16
-50 -38

Active In Progress Total Need Balance

Figure 6: Steel Value Chain Requirements 10

Source: Iran Steel Comprehensive Plan, Foolad Technic Co.
Regional Pellets Requirement
(Excluding Iran)

Figure 7: Regional Pellets Requirement (Excluding Iran) Capacity 11

Source: Metal Bulletin
 DRI Production –
What factors are effected?

12
 DRI Top Producers
Jan-17 Feb-17 Mar-17
Ranking Country (Ton) (Ton) (Ton)

1 Iran 1,325,000 1,200,000 1,400,000

2 India 1,244,000 1,149,000 1,270,000

3 Mexico 445,000 400,000 550,000

4 KSA 408,000 434,000 298,000

5 UAE 350,000 312,000 291,000

6 Egypt 292,000 289,000 320,000

7 Qatar 236,000 157,000 152,000

Table 1: DRI Top Producers Worldwide 13

Source: IROPEX-Worldsteel
 Factors in DRI Production

• Changing of steel demand in different regions

• Production price
• Economic changes which cause to switch
between raw material sources
• Increasing scrap consumption

14
Price Comparison of DRI Production

Figure 8: Price Comparison of DRI Production by Natural Gas & Coal 15

Source: US Energy Administration
Effective Criteria on Pellets & DRI
Marketing

16
Global Trade – Could iron ore be
exported internationally?

17
 Iron Ore Export
Million Tons
Iron Ore Export (Total )
Iron Ore Export (Private Sector)
23.5
20.8 20.2
18
14.8 14.8
12
8.7

4 4 4.67

2012 2013 2014 2015 2016 2017

Figure 9: Iran’s Iron Ore Export by Sector 18

Source: IROPEX
Status of Iron Ore Export to China

Iron Ore Exported to Average Iron Ore Export

Year
China (Million Tons) Price USD/T

2013 23.5 106

2014 20.2 86

2015 13.5 44

2016 16.4 58

Table 2: Status of Iran’s Iron Ore Export to China 19

Source: CISA
Iran’s Iron Ore Supply/Export Bottle Neck

• Iron ore price fluctuation

• High cost of local transportation
• Iron ore production productivity
• Iron ore fines & lump export duty which
announce by the Iranian government on and
off basis
• Many small & medium scale iron ore mines
are closed and abandoned
• New exploration to be continued
20
 Conclusion
• Prospect for DR Pellet exports from Iran is very
clear. Iran became self sufficient for importing
DR Pellet since beginning 2016, and will start its
export this year by removing 15% export duty.
• Iran’s pellet export will slightly affect on MENA
region market. Both prices of pellet and partly
concentrate to be affected by that in short period
of time.

21
 Conclusion
• Competition of Vale & LKAB won’t create a big
problem for Iran’s pellet export. China is a good
market for Iranian pellet.
• DR Pellet are producing in the most of countries
in the Middle East such as Iran, Kuwait, UAE,
KSA, Bahrain, Qatar and Oman due to high
demand in the MENA region. These productions
will be growing in 2017.

22
 Thank You

Websites: www.iropex.ir
Email: info@jtc-ltd.com