Algeria to launch second DRI production facility by end of year

Thursday, 15 August 2019 16:40:49 (GMT+3)   |   Istanbul

Algeria is set to have another direct reduced iron (DRI) module launched soon as investment continues in one of the key projects for steel production in the country. As a result, potentially Algeria’s billet imports might be reduced, but trade will generally depend on the development of the market situation.

Algerian Qatari Steel (AQS) officially plans to launch the 2.5 million mt per year DRI module by the end of October this year. Some market sources, however, foresee that the start-up will be pushed back until the end of the year. As a result, Algeria will have a second DRI producing facility. The first one of the same capacity, launched late last year, is currently operated by Tosyali Algerie. In addition, AQS plans to start its 2.2 million mt per year EAF at the end of September.

Once the project is commissioned and the equipment is successfully put into operation, AQS is expected to benefit from higher cost-efficiency and to lower its dependence on import billet feedstock. However, taking into account the reduced rebar rolling utlization rate as a result of subdued domestic demand in Algeria, the billet requirement of AQS has been reduced recently. “Domestic sales are limited due to political reasons, which will not be resolved easily,” another Algerian steel producer said. In addition, once its very own steel production is in place, AQS is foreseen to target longs exports as well, SteelOrbis understands.

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