When the Denominator Changes

That assumption can be misleading. Iron ore quality is becoming more variable, gangue levels are increasing, and producers are seeking greater flexibility in the feedstocks they can utilize. At the same time, DRI products can vary significantly in metallization and carbon content. Gangue, unreduced iron oxide, and carbon all contribute mass, and in some cases value, to the final DRI product. As a result, one tonne of DRI produced in one plant may not represent the same amount of metallic iron, nor the same value to a steelmaker, as one tonne produced in another. This can lead to conclusions that appear intuitive but are not necessarily correct. Consider the following hypothetical cases:

• Case A (Premium DRI): A plant processes high-grade pellets (67.5% Fe) and produces DRI with 95% metallization and 2.8% carbon. Natural gas consumption is 2.55 Gcal/t DRI.
• Case B (Lower-Grade DRI): A plant processes lower-grade pellets (64.0% Fe) and produces DRI with 91% metallization and 1.5% carbon. Natural gas consumption is 2.40 Gcal/t DRI.

At first glance, Case B appears more efficient because it consumes less natural gas per tonne of DRI produced. However, when normalized to the amount of metallic iron delivered, the picture changes. Case A requires 2.86 Gcal per tonne of metallic iron, while Case B requires 2.96 Gcal per tonne of metallic iron.

The apparent efficiency advantage disappears because the denominator has changed.

As the direct reduction industry evolves, comparisons based solely on tonnes of DRI may no longer provide a complete picture of plant performance or product value. A more meaningful benchmark may be specific consumption per tonne of metallic iron produced, while also recognizing the contribution of carbon contained within the product.

Benchmarking, process optimization, and even technology selection should increasingly reflect two realities: the need to process a broader range of iron ore feedstocks and the importance of DRI quality, particularly metallization and carbon content.

Ultimately, steelmakers are not purchasing tonnes alone. They are purchasing metallic iron and the value that the DRI delivers to the steelmaking process.

If metallic iron is the true product being delivered, perhaps it is time to reconsider how performance is measured.