Ezz Steel is one of the biggest steel producer in Egypt & the MENA region, exporting high quality steel products to most of the countries across continents adopting the most advanced steelmaking technology. Investments of more than $4 billion in the latest technology have ensured that the quality and accuracy of the company’s products is continuously refined and improved, along with the environmental performance of its plants.
With the addition of the new Direct Reduced Iron (DRI) mega module at Ain Sokhna Ezzsteel , has become the second largest DRI producer worldwide, with a capacity of 5.1 million tons per year.
Steel 360 in an exclusive interview with Gopal Seenivasgam, Director, DRP of Ezz Steel talk about the growth even facing uncertain times and how technologies paved way for its competitiveness making it both domestically and internationally strong player. Below are the excerpts of the interview.
Q. Egyptian steel industry is going through random changes both externally & internally, Is Ezz Steel able to accommodate the changes especially with DRI?
Ezz Steel has two product ranges – long products and Hot Rolled Coils. The installation of the DR Plant was driven by the need to improve the quality of the HRC. The successful start-up of the HYL III, DR plant in December 2015, has allowed Ezz Steel to meet this objective.
Q. How do you see when DRI producers are using Blast furnace pellets in their blend with the shortage of DR pellets and if so are the outcome healthy?
The need to use BF grade pellets is driven by the present world shortage of DR grade oxide pellets. This has given the opportunity to a number of producers of traditional BF grade pellets to switch to producing oxide pellets suitable for processing in DR plants. Ezz steel has processed a number of these ”Non DR Grades” including BF grade. There are a number of factors that need to be taken into account when processing BF grade pellets – low Fe content, high silica, high gangue, lower crushing strength and being un-coated. Each of these has a “cost factor” that has to be taken into account when deciding to procure BF grade pellet. In Ezz Steel’s case the cost analysis proved that it was a viable model.
Q. As the Director of DRI tell us about the success and challenges you came across in Ezz Steel?
The major challenge that we had to overcome initially with the project was the now infamous revolution in 2011. The project was put “On Hold” for a period of two years. The construction commenced in November 2009, thus, it was well into the construction when the Main Contractor vacated the site. About 40% of the construction had been completed and about 60% of the equipment had arrived on site. The task was to ensure the installed and stored equipment was preserved during this period.
On re-commencing the project in late 2013, the first task to identify and implement a plan to re-furbish the installed and stored equipment. Due to the nature of complexity of some of the equipment, they had to send off shore to be refurbished. The co-ordination of the on-site and offsite refurbishment had to be managed very critically.
The challenge from late 2015, to now has been to keep the plant operational. There have been a number of negative factors – initially shortage of Natural Gas, which has greatly improved since the finding of the gas field in the Mediterranean. Availability of oxide pellets had previously limited our operation and lastly availability of foreign currency to purchase all off-shore requirements.
Q. How have you comprehended the changes both in Egypt & globally when there is uncertainty looming over?
Our primary long product is for the local market. This is strong and thus is not affected by the global uncertainty. Our second product HRC if for the export market and this has been influenced by the global current situation. When the EU imposed tariffs on the import of Chinese products, we were able to pick up some of the European demand. The next challenge will be to monitor the effect of USA imposing tariffs on many of the producers and how they will react. Will there be a possibility of the steel that was destined to the USA now being dumped in Egypt, we have to wait and see.
Q. Technology is making the strides in steel industry, how Ezz Steel implemented the technology know how in its growth?
Obviously with the construction of the DR plant, specifically HYL technology, Ezz Steel is keeping up to date with latest technology and thus, for downstream operation it requires the upgrading of the EAF operation to handle higher % of DRI within the melt mix.
Q. How you are scaling up the production in your upstream operations?
With the availability of DRI, downstream operations have had to adopt their operations due to consistent quality and availability of the feedstock. This enables them to plan their productions run more consistently and meet more stringent product quality.
Q. Ezz Steel is the largest independent steel production in Middle East & North Africa – How firmly you have made your global foot prints?
Ezz Steel is now a global player both as a purchaser of raw materials and equipment – oxide pellets, scrap, spare parts and as a supplier of finished and semi-finished goods. Ezz Steel has dealt with the major raw material suppliers and in turn with Hot Roll Coil consumers globally.
Q. Pellets prices are moving higher, do you see restrain in prices in near future and has it pushed the sponge prices?
Pellet prices will see an upward trend, due to world shortage, the “China” factor and additional plants being commissioned and brought on line. The net effect is the increase in costs of sponge iron and/or the final product. This will be evident through 2019.
Q. Do you see the demand for Indian pellets in the export market to continue, even if Samarco makes a come back?
Ezz Steel is not a consumer of Indian pellets, but, in general, a number of pellet producers worldwide have converted existing facilities or brought on line new facilities to meet the demand, with the loss of Samarco’s portion. Some of these will cease, but, the ones with long term contracts and established clients will remain even if and when Samarco return to the pellet market.