WORLD DIRECT REDUCTION STATISTICS - Midrex

2019

WORLD DIRECT REDUCTION STATISTICS

THE WORLD LEADER IN DIRECT REDUCTION TECHNOLOGY

CONTENTS

2 World DRI Production

6 World DRI Production by Region/Year

7 World DRI Production Tables

9 Major Trade Routes for International Trade of DRI

10 World DRI Shipments

11 World Direct Reduction Plants

Audited by

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TABLE OF CONTENTS

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World DRI production surpasses 108M tons in

4 TABLE OF CONTENTS

2019 Top 5 DRI Producing Nations

2019 from production

COUNTRY

PRODUCTION (Million Tons)

India

33.74

increasesNiEnWInCdAiaP,AIrCaInTY AND PLAIrNanTS UNDER28C.5O2NSTRUCTION

and Algeria

Russia

8.03

No new large scale direct reductMioenxiccoapacity was contracted in 2019. The start-up

Cleveland-Cli s

Con5s.t9ru7ction of a 1.6M tons per year MIDRE

A nnual global DRI production reached another record

Saudi Arabia Cle5ve.7la9nd-Cli s, Inc. continued in 2019 and is o

in 2019 with 10o8f.1MAltgonesriparnoduQcaedt.aDriRISotuetepul t (wAaQs S)

in

Algeria and

Source: World Steel

Assoinciathtieonla, sStIMqAua, artnedr

of

2020.

Cleveland-Cli

s ann

up 7.3% from 2018, thCelefovuertlhacnodn-seCclui tivse riencotrhdeyeUar.SSAincwe ill addMid4re.4x Tmechinlloiloognies, Incb. uild the plant on a brownfield site at the Port o

2015, worldwide DRItooutnpsut hoafs inccarepaasecditbyy 3i5n.5M20to2n1s,.orIn Iran, Pasargad USA) in June of 2017. Groundbreaking for the p

nearly 49%. For 2019, the growth was primarily driven by the 11.3M tons, a 1% gain froomf 20189. Hot briquetted iron (HBI),

increase in coal-baserdepDoRIrtinedIndsiat,athrteinhigghucpapaacit1y.5utMili-t/y wMhiIcDhRisEaX cPomlapnactted formThoef DToRlIedsouitlaobclaetiofonr wshaisppcihnogs, en due to i

zation of existing andinne2w0g1a9s;-bEaisgehd tploantthseinr Iprarno,jaencdtsth,eincljuudmipnegd t6o 9in.7MIratonn,s, a 7.s1%eveinraclrefausteuryeeacru-sotno-myeearrs., as well as its logis

ramp up of Tosyali's wMiIDthREaXt? oPtlaanlt cinapAalgceirtiay. Oofnc7e.5m5oMre,tons aTrheeaMtIvDaRrEiXouPsrocessinwcalusdrinegspaonosridbaleblfeorga6s5a.4vMailatobnilist,y and access

the combination of India and Iran produced more than half or 60.5% of all DRI procdaurcrieedrsg. Iltobwaill yp,roavnidde7a9.d8o%meosftiacllsource of HB

of the global DRI. phases of execution.

gas-based DRI. The prfuordnuaccteiosnteefrlommakeMrsIDinRtEhXe GPrlaenatsLakes region

The production of hot DRI (HDRI), which is fed directly to increase by 5.3% year-opne-yraetaior,nw. Thheerecaosntshtreucptrionduocftitohne plant was t

a nearby meltshop foMr IeDnRerEgyXsavings, slightly increased to from other gas-based prdoocwesnseinsMdeacrcreha2s0e2d0bdyu8e.5to%m. andatory COVID-

UNDER CONSTRUCTION

sures. The workforce was remobilized in June project.

Algerian Qatari Steel (AQS)

2019 World DCRonIstPrurctoiodn uof cat2i.5oMntobnsypePr ryeoarcMeIsDsREX Combination

DRI Plant for Algerian Qatari Steel (AQS) continued throughout

PERED? 2.1%

2019. AQS is a joint venture between Qatar Steel International,

Otherthe AlgerianRiontvaersytmKeilnnt group SIDER, and the National Invest-

0.2%ment Fund of A2lg4e%ria. The plant, located in BTeollatraa,lAWlgeoriral, d37P5 roduction: 108.1 Mt

km east of Algiers, will provide HDRI and CDRI to a nearby EAF melt shop, which will produce 2.0M tons per year of rebar and

2017

2018(r)

HYL/Energiron 13.2%

wire rod.

MIDREX?

Construction was impacted by COVID-19 in the spring of

2020;

the

plaMntIwDiRllEbXe ?ready 60.5%

to

start-up

in

thHe YneLa/rEfunteurrge.iron PERED?

64.8% 16.9%

*

61.5% 15.7% 2.4%

Other

0.7%

0.2%

Rotary Kiln

17.6%

20.2%

2019

60.5% 13.2% 2.1% 0.2% 24.0%

2019 World Direct Reduction Statistics

Page 2

* included in `other' (r) revised

HYL / ESnouerrcge:irMoindr:ex Technologies, Inc.

In January 2019, China's Sinosteel Equipment a

contracted Tenova HYL to supply a micro-modu ? 2020 Midrex TechnolSogidiees,rI?nrcg. ica del Mut?n" (ESM) at Puerto Su?re

cold DRI plant has a capacity of 0.295.4M.20 t/y.

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BEHIND THE NUMBERS

The year 2019 was marked by high volatility in iron ore pricing and availability, following the dam breach in Brazil, inclement weather in Australia, and other events. The 62% Fe iron ore sinter fine index started at $70/t in January, peaked near $120/t in July, and settled around $80-90/t for most of the second half of the year. Pellet premiums also experienced volatility during the year. On the other hand, the price for steel products decreased during the same period. Overall, plants with a captive iron ore source fared better than plants relying on market pellets, which saw diminishing margins between higher ore price and decreasing steel price. In the latter case, some plants elected to take outages or increased their scrap usage, as it was more available internationally than in previous years.

PRODUCTION LEADER

INDIA

In 2019, India continued its streak as the number one DRI producer worldwide. This past year, the substantial growth was due to increased demand for steel products and the productivity gains of the rotary kilns, which were able to use higher quality coal imported from South Africa and Indonesia, according to the Sponge Iron Manufacturers Association (SIMA). Rotary kilns saw a 27.9% jump from 2018, which was already a 35% increase from 2017. Gas-based DRI plants benefited from lower natural gas pricing, as the global price of LNG decreased and the country invested in LNG infrastructure.

Production of DRI in Iran was a record 28.5M tons, all from natural gas-based processes. This was a 10.9% increase over 2018. The MIDREX Process accounts for nearly 92% of DRI

production in Iran. Several MIDREX Modules that either started production or ramped up during 2019 were responsible for the bulk of the growth. Most of the plants using the MIDREX Process operated at or very near full capacity utilization. Another six MIDREX Modules are under construction. The four PERED? modules produced slightly less tonnage than in 2018.

Russia maintained its 3rd place as a producing nation with another record of 8.0M tons produced after establishing the mark of 7.9M in 2018. Almost all Russian DRI plants experienced record-breaking productivity in 2019, benefiting from captive iron ore, low natural gas price, and an increased demand for HBI.

Mexico regained its 4th place from Saudi Arabia and posted virtually the same production numbers as in 2018: 5.97M tons. Saudi Arabia's production declined from 6.0M to 5.79M tons due to market pressures. Most countries in the Middle East and North Africa region (MENA) saw similar declines; Egypt suffered the most with a drop of nearly 29%. One notable exception was Oman, where production increased by 17% over 2018. Both Libya and Algeria posted positive gains from 2018; Algerian DRI production jumped almost 15-fold due to ramp up of Tosyali Alg?rie, which started production of its MIDREX HDRI/CDRI combo plant, rated at 2.5M tons per year, in late 2018.

In South America, Argentinian production of DRI suffered from poor local market conditions and natural gas curtailment. Venezuela continued to produce at less than 15% of the rated capacity, due to limited availability of iron ore and spare parts; Venezuela is only making HBI for export.

Algerian plant Tosyali Alg?rie started production late 2018

2019 World Direct Reduction Statistics Page 3

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NEW CAPACITY AND PLANTS UNDER CONSTRUCTION

No new large scale direct reduction capacity was contracted in 2019. The start-up of Algerian Qatari Steel (AQS) in Algeria and Cleveland-Cliffs in the USA will add 4.4 million tons of capacity in 2021. In Iran, Pasargad reported starting up a 1.5Mt/y MIDREX Plant in 2019; Eight other projects, including 6 in Iran, with a total capacity of 7.55M tons are at various phases of execution.

MIDREX

UNDER CONSTRUCTION

Cleveland-Cliffs Construction of a 1.6M tons per year MIDREX HBI Plant for Cleveland-Cliffs, Inc. continued in 2019 and is on target to start in the last quarter of 2020. Cleveland-Cliffs announced plans to build the plant on a brownfield site at the Port of Toledo (Ohio, USA) in June of 2017. Groundbreaking for the plant was in April of 2018.

The Toledo location was chosen due to its proximity to several future customers, as well as its logistics advantages including affordable gas availability and access by multiple rail carriers. It will provide a domestic source of HBI for electric arc furnace steelmakers in the Great Lakes region when it begins operation. The construction of the plant was temporarily shut down in March 2020 due to mandatory COVID-19 related measures. The workforce was remobilized in June to complete the project.

Algerian Qatari Steel (AQS) Construction of a 2.5M tons per year MIDREX Combination DRI Plant for Algerian Qatari Steel (AQS) continued throughout 2019. AQS is a joint venture between Qatar Steel International, the Algerian investment group SIDER, and the National Investment Fund of Algeria. The plant, located in Bellara, Algeria, 375 km east of Algiers, will provide HDRI and CDRI to a nearby EAF melt shop, which will produce 2.0M tons per year of rebar and wire rod.

Construction was impacted by COVID-19 in the spring of 2020; the plant will be ready to start-up in the near future.

HYL / Energiron:

In January 2019, China's Sinosteel Equipment and Engineering contracted Tenova HYL to supply a micro-module for "Empresa Sider?rgica del Mut?n" (ESM) at Puerto Su?rez in Bolivia. The cold DRI plant has a capacity of 0.25M t/y.

PERED

Construction of the 0.3M t/y DRI module fed by coke oven gas for Shanxi Taihang Mining, contracted in 2013, is in progress.

2019 World Direct Reduction Statistics Page 4

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2019 World Shaft Furnace Production by Process

MIDREX? 79.8%

Other Shaft Furnace

20.2%

Total World Production: 81.9 Mt

2017 2018(r) 2019

MIDREX?

79.0%

Other Shaft Furnace 21.0%

77.2% 22.8%

79.8% 20.2%

Source: Midrex Technologies, Inc.

Shaft Furnace DRI Production by Process and by Year

Year MIDREX? Other Shaft Total

Furnace

Year MIDREX? Other Shaft Total

Furnace

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

10.73 11.96 13.26 15.91 17.83 19.86 21.03 23.08 24.82 26.12 30.12 26.99 30.11 32.06 35.01 34.96 35.71

5.25 5.40 5.29 5.73 7.01 8.15 9.12 9.55 8.52 8.81 9.39 8.04 8.88 9.72 11.34 11.00 10.91

15.98 17.36 18.55 21.64 24.84 28.01 30.15 32.63 33.34 34.93 39.51 35.03 38.99 41.78 46.35 45.96 46.62

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(r) revised

39.72 39.85 38.62 42.01 44.38 44.76 47.56 47.12 45.77 47.14 56.65 62.10(r) 63.37

11.20 9.84 7.88 9.81 11.03 10.79 11.29 12.04 11.62 12.66 14.68 18.11 16.57

50.92 49.69 46.50 51.82 55.41 55.55 58.85 59.16 57.39 59.80 71.33 80.21 81.94

MIDREX?

`90 2019 World Direct Reduction Statistics Page 5

Other Shaft Furnace

? 2020 Midrex Technologies, Inc.

81.94 Mt

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