Steel Products

Goncalves Bullish on Cliffs' HBI Prospects

March 24, 2018

“The trend is our friend,” said Lourenco Goncalves, the chief executive of Cleveland-Cliffs, Inc., pointing to the growth of electric arc furnace (EAF) steelmaking around the world. Cliffs is on track for commercial production of hot briquetted iron (HBI) by mid-2020 at its facility under construction in Toledo, Ohio, he told executives at S&P Global Platts’ Steel Markets North America conference Tuesday in Chicago.

Cliffs’ new plant will have the annual capacity to produce 1.6 million tons of HBI, which will have a big impact on a 3-million-ton market. “To displace half of what is imported now should be an easy task,” Goncalves said.

Steel minimills that use EAFs need pure iron units to dilute the impurities in the melted scrap. HBI is a cheaper alternative to pig iron, which is produce by integrated mills in their basic oxygen furnaces (BOFs). Asked during Q&A if he is concerned about integrated producers bringing back idled capacity to produce pig iron, Goncalves noted that restarting a BOF takes a lot of time and money. “I don’t see an integrated mill restarting pig iron production to support an EAF mill that is a competitor,” he added.