Iran Eyes Purchase of Indian Granulated Pig Iron

India’s Tata Steel Company has a good chance of ramping up exports of its new product, granulated pig iron, under the trademark Ferroshots. Although the producer has entered the segment fairly recently, the alternative material has already made its mark.

Iran is seriously interested in the product and considers the possibility of close cooperation with Tata Steel due to the advantages of the material over the traditional feedstock, according to Metal Expert–a Ukraine-based provider of news and analysis for steel products and steelmaking raw materials industries.

The Indian company started producing granulated pig iron under the trademark Ferroshots in March 2016 at its plant in Kalinganagar, Odisha, capable of putting out 6,500 tons of the material per day.

The Swedish company Uvan Haghors Teknologi is the supplier of the technology and equipment.

“The Tata Ferroshots product has been commercially launched in India for the first time and is expected to be a game changer in the industry, as it may replace pig iron, scrap or DRI. Its properties lead to better yield, higher productivity and lower energy cost. The process of manufacturing is environment friendly and safe,” reads the equipment supplier’s official statement.

The Ferroshots granules have a Fe content of 94-95% and lower bulk density as compared to the traditional input materials such as pig iron, scrap and direct-reduced iron. As a result, the productivity is higher and more steel can be made from a single cast. The power consumption is also lower by 1.3 and 1.8 times as compared to scrap and DRI-based steelmaking respectively. It has a wide scope of applications and can be used in EAF, IF, BOF as well as foundries.

Within a few months of its launch, the material has generated significant demand in domestic market. The company sees immense export potential as a number of enquiries have been received from different foreign customers.

“Most of our current sales are targeted to domestic Indian buyers in view of better prices. However, we are open for sales to major steel producers overseas, provided the price realization makes sense,” a market source said.

The first trial export shipment was made to Southeast Asia in August.

Now, Iran is eying the purchase of the Indian material as it considers Ferroshots as the way out of the current situation in the domestic raw material market. While the majority of Iranian iron ore mines are currently out of operation and the import of the raw material is also limited due to logistics issues, Ferroshots can be a suitable alternative for the country.

“If we import Ferroshots from Tata Steel, we will be able to increase steel production and compensate for the iron ore shortage, especially since granulated pig iron can be used by small steelmaking companies too,” said Keyvan Jafari Tehrani, a member of the board of Iranian Iron Ore Producers and Exporters Association and the director for international affairs.

The reason Iran has chosen India, among other granulated pig iron producers around the world, is mostly due to the two countries’ close ties. India was one of the primary buyers of Iranian crude oil during the sanctions period.

In return for the oil cargos, Iran received a significant amount of credit from India, which was arranged to be paid in Indian rupees and mediated through the United Commercial Bank (UCO Bank, Kolkata).

“As banking issues and funding are the main challenges for Iran at the time, it is much easier to collaborate with reliable partners. India is surely among them,” said the IROPEX official.

Tehrani noted that IROPEX’s initiatives for purchasing Tata Steel’s patent for production of Ferroshots have been fruitless so far, as the Indian firm is adamant on embarking on exports.

“But we are still negotiating and trying to find the best solution for both parties,” he added.

This is while only one steelmaker in Iran uses blast furnaces and is capable of utilizing the patent–Esfahan Steel Company. Even if ESCO can obtain the technology, the country’s limited coal production and its subpar quality will pose a challenge to domestic production of granulated pig iron.

Granulated pig iron and analogues have been in the market for years. Producers in Austria, Sweden and South Africa have the capacities of about 1 million tons in total. Also, a few new projects in India are in their final stage and will be put on stream in 2016-17. The companies concerned are JSW Steel and Jindal Steel and Power Limited, according to UHT. It can be concluded that granulated pig iron has every chance of occupying its small niche in the segment for raw materials in the near future.