Experts in
India claim that volatile steel prices and the tight availability of
coking coal in the international market will eventually force Indian steel producers to use direct reduced iron (DRI), or
sponge iron, for
steelmaking.
Blast furnaces and basic oxygen furnaces consume more
coking coal, meaning they rely more heavily upon increasingly expensive imported raw material. DRI
production on the other hand does not require
coking coal, but instead good quality non-coking coal. In this case,
India's abundant non-coking coal and
iron ore resources set the stage perfectly for an increase in DRI
production.
Assuming an increase in DRI output,
India is expected to surpass leading DRI producing countries, such as
Brazil,
Venezuela,
Mexico and
Iran.
India produced 8.5 million tons of DRI in 2004, 17% of total world
production.
India is expected to account for 20-25% of world
production by 2010.