Steel Products

Voestalpine to Build DRI Plant in Texas

Written by Sandy Williams

March 18, 2013

Written by: Sandy Williams

Voestalpine will invest 550 million euro ($718 million) for construction of a DRI plant in San Patricio County near Corpus Christi, TX. The facility will be cable of producing 2 million metric tons of DRI and HBI (hot briquetted iron) annually. A start-up date in early 2016 is projected.
 
Half of the DRI production will provide feed stock for Austrian steel production in sites in Linz and Donawitz while the rest will be held in reserve and sold to partners interested in long-term contracts.

“In the USA, we can access energy cost efficiently and operate in a politically stable, predictable environment,” explained Wolfgang Eder, Chairman of the Management Board of Voestalpine AG, and head of Voestalpine’s Steel Division. “This investment also provides the Voestalpine Group an additional growth option in North America over the long term,” he added.

Eder said local cooperation and U.S. efforts to reindustrialize the economy influenced the decision to build at the Texas site. Eder said a similar plant would be unfeasible in Europe due the “lack of competitiveness in terms of operating costs.” Natural gas, used as the reducing agent in DRI production, is a strong driver in the U.S. selection, currently averaging a quarter of the price available in Europe. The 500 acre site on Corpus Christi Bay also has the advantage of direct access to the ocean.

This will be Voestalpine’s first U.S. mill and possibly an indication that other foreign mills may begin to take advantage of the low cost natural gas in the US through construction of DRI plants. This would add an extra kick to the expected increase in U.S. DRI capacity and reinforce predictions that scrap prices will fall as DRI substitution becomes more available.

Sandy Williams

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