The major Indonesian steel producer Dexin Steel is going to enter the HRC market after the launch of its new hot-strip mill. Moreover, the company has intended to build DRI-based plant also for HRC production in the Middle East.
The hot rolling mill was ordered by Dexin Steel in October 2022 and the initially expected capacity was 4.5 million mt. The company will start with 2 million mt of HRC per year in Q2-3 of this year. This will reduce allocation of slabs sent by Dexin Steel in the export market. In particular, at the moment the slabs allocation from Dexin is from 50,000 mt to 200,000 mt per month depending on the market situation.
At the moment, Dexin Steel is focused on semis sales mostly, having three blast furnaces to produce 7 million mt per year. Also, it has 1 million mt of rebar line and 500,000 mt of wire rod production. Dexin entering the HRC market will lead to increase of competition in the Asian market as well as in Europe, where prices of Vietnamese HRC have been the most competitive lately.
In addition, Dexin Steel has plans to build a DRI-based plant also for HRC production in the Middle East. The project includes two phases with the annual capacity 2.5 million mt each, according to market sources. The location of the plant is expected to be the UAE, though the project is on the initial stage and details may be changed. The project is prepared in cooperation with Chinese partners and iron ore giant Vale. Since there is a lack of local HRC production in the Middel East, Dexin’s project is going to substitute a part of imported HRC, from China specifically. “The new investments in the GCC should be for flats only since longs [market is] oversupplied. Basically, integrated flats [mill] with good diversity will change the import picture, at least for the UAE,” a local source told SteelOrbis.