Iron Ore Pellets Among Goods Constrained by Middle East War

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

As violence in the Persian Gulf ties up shipments of iron ore pellets, Strategic Resources and other companies are calling for more North American production.

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Pellet Problems Pile Up

A growing list of companies involved in the manufacturing of everyday products are being affected by the ever-widening conflict in the Middle East. Numerous industries stand to be affected by Iran's effective closure of the Strait of Hormuz, including the North American Metals & Minerals Industry, for which the Gulf Region has become a major supplier of products such as iron ore pellets. But this presents an opportunity for North American companies in this sector who have long sought to accelerate development. Industrial Info is tracking more than US$3 billion worth of active and proposed projects to produce iron ore pellets and similar agglomerates in the U.S., Canada and Mexico.

Canada-based Strategic Resources Incorporated sounded the alarm about the war's effect on the iron ore pellet market: "Disruptions to shipping routes and energy markets in the region are tightening already constrained pellet and high‑grade iron ore balance and introducing new volatility for steelmakers advancing decarbonization strategies," the company said in a press release Thursday.

The war is having a more immediate effect on UK-based Anglo American plc and Brazil-based Vale S.A., which earlier in the week saw the destinations of several cargoes of iron ore diverted from destinations in the Middle East to different ports in East Asia, according to ship-tracking data from analytics company Kpler.

Strategic Resources used these events to push for the development of its long-proposed BlackRock Project at the Port of Saguenay in Quebec, which is designed to be a high-purity iron pelletizer plant. The company said Phase 1 of the project, now in its economic evaluation phase, would produce 4 million tons per year of high-quality iron ore pellets for North American and European steelmakers.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Plant and Project databases can learn more about BlackRock--including key components, investment values and necessary equipment--from a plant profile and a detailed project report.

"If we want reliable access to high‑quality pellets to support low‑carbon steelmaking, we need to build more capacity in stable, resource‑rich jurisdictions like Canada and the rest of North America," said Sean Cleary, the chief executive officer of Strategic Resources, in the press release.

Vale is proposing a manufacturing plant for the production of briquettes, another iron ore agglomerate that the company says will reduce steelmaking carbon emissions by as much as 10%. The project remains in its early development phases, with southern Louisiana considered likely for site selection. Subscribers can learn more from a detailed project report.

By the Numbers

• US$3 billion worth of projects for the production of iron ore pellets and similar agglomerates in the U.S., Canada and Mexico
• 4 million tons per year: Proposed production capacity for iron ore pellets at Strategic Resources' BlackRock Project

Two Startups on the Horizon

In the near term, two Canadian iron ore pellet-production projects are set for completion early in the second quarter. Quebec Iron Ore Incorporated, a subsidiary of Champion Iron Limited, is putting the finishing touches on an addition to its Bloom Lake Iron Ore Mine in Fermont, Quebec, which is designed to increase production of direct-reduced iron (DRI)-grade pellets at the 15 million-metric-ton-per-year facility by as much as 50%.

Separately, ArcelorMittal is nearing completion on a decarbonization project at its pellet plant in Port-Cartier, Quebec, which produces about 10 million metric tons per year. The company expects the new system will reduce carbon emissions up to 20%, partly by converting the production of blast-furnace pellets into DRI pellets. The project is part of a broader effort by ArcelorMittal to transition from traditional blast-furnace pellets, typically higher in carbon emissions, to DRI-grade pellets at its facilities.

Subscribers can learn more about these projects from detailed reports on the Bloom Lake and Port-Cartier projects.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects for the production of iron ore pellets and similar agglomerates in the U.S., Canada and Mexico.

Subscribers can click here for a full list of detailed reports for projects mentioned in this article and click here for a full list of related plant profiles.

Key Takeaways

• Iron ore pellet producers are among those who stand to be affected by Iran's effective closure of the Strait of Hormuz.
• Strategic Resources and other companies in the North American sector are pushing for more U.S. and Canadian production.
• Many such projects, either proposed or under construction, aim to reduce the carbon emissions associated with production.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).